Slide 1: Q3'2015 Results Presentation
Q3’2015 Results Presentation November 5, 2015
Slide 2: 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 statements regarding future
Slide 3: Recent Highlights
Recent Highlights Douglas McCrosson President & Chief Executive Officer
Slide 4: Recent Business Highlights
Recent Business Highlights Q315 Revenue: Q315 Net Income: $26.8 Million $2.5 Million vs Q314 Revenue vs Q314 Net Income rE rt 44% Large Backlog: $421.7 Million at 9/30/15 vs. 12/31/14 Up Funded backlog $1 8M Unfunded backlog up $5.1 Million up $12.8 Million CPLaccs :
Slide 5: Financial Highlights
Financial Highlights Vincent Palazzolo Chief Financial Officer CPLaccs .
Slide 6: Recent Financial Highlights
Recent Financial Highlights Revenue Cost of sales Gross profit (loss) Selling, general and administrative expernises Income (loss) from operations Net income (loss) Income (loss)per common share — basic Income (loss)per common share — diluted For the 3M Ended September 30, For the 9M Ended September
Slide 7: Revenue Breakdown by Program
Revenue Breakdown by Program 3Q 2015 Defense Programs: $15.5 M of which $15 million was from Tier 1 military subcontracts with OEMS and $0.5 million was from government prime contracts. mainly related to our Triumph, Embraer and Honda programs. CPLA 9M 2015 Defense Programs: $37.5 M of which $37 mil
Slide 8: Gross margin and A-10 program effect
3Q 2015 9M 2015 20.9% 19.0% 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 3Q 2015 9M 2015 23.4% 23.4% This increase is primarily the result of higher gross margin on certain commerc
Slide 9: 2015: Record Year in Terms of Revenue
2015: Record Year in Terms of Revenue Revenue ° $95.0M — $98.0M © 19.0% 3 20.0%... lower than historical margin as CPI Aero will continue to book A-10 WRP revenue at zero profit. + Range of 22.5% to 23.0% for non-A10 WRP programs aa iis, + $7.2M - $7.5M
Slide 10: Revenue Breakdown: by Market
Revenue Breakdown: by Market Military/commercial split effected by recent military contract wins 2015 Revenue (Guidance) $95.0M - $98.0M Commercial 39% Strong revenue driven by recent wins Commercial Remains steady as the majority of new business winsin 2014 were for military programs Existing progr
Slide 11: Revenue Breakdown: by Subcontractor Role
Revenue Breakdown: by Subcontractor Role 2015 Revenue (Guidance) $95.0M - $98.0M Doubles due to recentwins Tier 1 Double digit growth Tier 2 Slight decline due to G650
Slide 12: Revenue Breakdown: by Category
Revenue Breakdown: by Catego Non-Aerostructures business expected to increase to 40% of total revenue 2015 Revenue (Guidance) $95.0M - $98.0.0M Kitting& SCM 33% gecak_ seis seeremeal seer Kitting & SCM A - ™% Over 65% growth erosystems fo fueled by our E-2/ _ tt C-2 multi-year contract Aerostructure
Slide 13: 2015 Financial Initiatives
2015 Financial Initiatives Expectto continueto pay down Swenaiien debt and reduce interest expense Position Investments ai ited to favorably impact operating efficiencies & Robotics Generated$1.6 Min cash from Generate Positive’ operations for the nine months of 2015; Cash Flow from used $7.4 Min op
Slide 14: Capital / Investments
Capital / Investments Received approx. $8.1 million tax refunds related to the profit adjustment made to A-10 WRP in 2014. Approx. $0.5 million in both federal and state net operating loss carryforwards $35 M Revolving Credit Facility Investments + Facility improvements * Cap-Ex + New programs + Mar
Slide 15: Backlog, Recent Programs, Bids and Market Update
Backlog, Recent Programs, Bids and Market Update Douglas McCrosson President & Chief Executive Officer CPLaccs ‘
Slide 16: Record Backlog
ecord Backlog Consolidated Backlog at 9/30/2015 — $421.7 Million Funded 30% / Unfunded 70% Defense 71% / Commercial 29% Unfunded backlogrepresents remaining potential value of long term agreements $295.9M $300.3M = Funded = Unfunded uMilitary Aerospace = Commercial CPLA 16
Slide 17: Long-Term Visibility - Contracts
Long-Term Visibility - Contracts (as of 9/30/15) Firm, Funded Contracts Provide Long-Term Revenue Visi 0s ‘09 10 41 12 13 14 “15 “16 «#17 «18 «19 ity and Operating Leverage 20 ‘21 ‘22 ‘23 ‘24 ‘25 US GOVERNMENT- forthe T-38C aaa is Potential to collectively generate revenue of $421.7M during their re
Slide 18: Recent Program Highlights
Recent Program Highlights High ° ights Extended E2/C2 OWP Kits requirements through 2019 Added new funded backlog of $63.6 million during 40°14 Major revenue and margin contributor during 3015 and expected to be important program to 4Q15 performance as well << EMBRAER Phenom 300 engine inlets is a w
Slide 19: Bid Pipeline
Bid Pipeline (9/30/15) Defense opportunities increasing Military vs Commercial By Position Within the Supply Chain Commercial — = Military = Tier1 Tier2 = Prime
Slide 20: Bid Landscape
Bid Landscape Defense Market Commercial Market Focus Focus Repairing and manufacturing spares Business jet and regional jet markets that for the current fleet of aging military align with our size, expertise and capability as aircraft. a Tier 1 supplier. Submitted several proposals to the U.S. Large
Slide 21: Focus Areas: 2015 and 2016
Focus Areas: 2015 and 2016 Maintain and grow Tier 1 status A Continuously improve delivery, quality and performance Improve margins EXECUTE Improve cash flow CPLA GROW a Continuedinvestment in automation and productivity Replace retired program revenues with additional new long-term programs Focus o
Slide 22: Margin Expansion Opportunities
Margin Expansion Opportunities Improving Efficiency Lean Manufacturing - Kaizen event + Nearly every assembly is in production * Kaizen brought together a multi-discipline team mode with representation from Manufacturing, Quality, + Focus on program execution Procurement, and Planning + Driving out
Slide 23: 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 technolo
Slide 24: Q&A Session
Q&A Q&A Session Douglas McCrosson President & Chief Executive Officer Vincent Palazzolo Chief Financial Officer 24
Slide 25: CPI Aerostructures
CPI Aerostructures Vincent Palazzolo, CFO (631) 586-5200 Investor Relations EG THE Lena Cati EQUITY GROUP (212) 836-9641 aE See