Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Investor Day (November 2014)
94 slides from Cpi Aerostructures's investor day presentation, Nov 24, 2014
Slide 1: Investor & Analyst Day Presentation
A Premier Supplier of Aircraft Structures and Systems NYSE MKT: CVU Investor & Analyst Day Presentation November 24, 2014
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: Agenda
Agenda 3 9:45am OPENING REMARKS Welcome Remarks and Agenda Overview Eric Rosenfeld, Non - Executive Chairman of the Board Douglas McCrosson, President & Chief Executive Officer 10:00am DEFENSE & COMMERCIAL AEROSPACE MARKET Trends Creating Opportunities Across the Enterprise Greg Hamilton, President
Slide 4: Opening Remarks: Eric Rosenfeld
Opening Remarks Eric Rosenfeld Chairman of Board of Directors Eric S . Rosenfeld has been the non - executive chairman of our BoD since January 2005 and a director and chairman of our strategic planning committee since April 2003 . Mr . Rosenfeld has been the President and CEO of Crescendo Partners,
Slide 5: Douglas McCrosson, Chief Executive Officer
Douglas McCrosson Chief Executive Officer Mr . McCrosson was named President and Chief Executive Officer of CPI Aero in March, 2014 . Mr . McCrosson joined the company in 2003 as Director of Business Development . During his tenure, he has held positions of increasing responsibility, including Vice
Slide 6: Aerospace & Defense Trends Creating Opportunities Across the Enterprise
6 Aerospace & Defense Trends Creating Opportunities Across the Enterprise
Slide 7: Gregory Hamilton, President Aviation Week
Gregory Hamilton, President Aviation Week and Aviation Market Leader for Penton Media Gregory Hamilton is President of Aviation Week, a Penton Business . He is responsible for the overall strategy and direction for Aviation Week’s network of digital, event, print and data/analytics services covering
Slide 8: Aerospace & Defense: Trends Creating Opportunities Across the Enterprise
8 Aerospace & Defense Aerospace & Defense: Trends Creating Opportunities Across the Enterprise • Five trends affecting A&D, economy in general • Global commercial air transport market – bubbles, cycles , and reality • Aviation Week outlook: challenges, opportunities for the supply chain
Slide 9: Voice of the Customer Video Presentation
9 Voice of the Customer Video Presentation E - 2D Advanced Hawkeye
Slide 10: CPI Aero Strategic Overview
10 CPI Aero Strategic Overview Douglas McCrosson Chief Executive Officer Plan Execute Grow
Slide 11: Douglas McCrosson Chief Executive Officer
Douglas McCrosson Chief Executive Officer Mr . McCrosson was named President and Chief Executive Officer of CPI Aero in March, 2014 . Mr . McCrosson joined the company in 2003 as Director of Business Development . During his tenure, he has held positions of increasing responsibility, including Vice
Slide 12: Our Mission, Vision and Values
Our Mission, Vision and Values 12 Our Values are … C ustomer service: Create the best possible buying experience for our customers P ride: In our work, the quality of our products and in our company I ntegrity: Do the right thing at all times and in all circumstances A daptability: React efficiently
Slide 13: CPI Aero's Unique Business Model
CPI Aero’s Unique Business Model Since inception: - Focused on assembly and integration - U se suppliers to manufacture 100% of components Provides a competitive advantage over vertically integrated competitors due to: • 30+ years of highly evolved assembly, supply chain and program management skill
Slide 14: About CPI Aero: Products and Services
About CPI Aero: Products and Services 14 Aircraft photos are for illustrative purposes only Manufacturer of aerospace structural assemblies and integrated systems for commercial and military markets Wing Spar Assys Fuselage Skin Panels Engine Cowl Doors ISR Pod Systems Engine Inlets Kits & supply ch
Slide 15: Product Portfolio
Product Portfolio 15 Wings Inlets / Nacelles Pods MRO Special Products Spirit G650 Cessna Citation X HondaJet Embraer Phenom 300 HondaJet Bell AH - 1Z Aerostructures Sikorsky H - 60 Window Assy Spirit CH - 53K Step and Rack Assy Aerosystems UTAS DB - 110 NGC ALMDS NGC AN/ASQ - 236 Sikorsky H - 60 Fu
Slide 16: CPI Aero's Role Within Supply Chain
CPI Aero’s Role Within Supply Chain CPI Aero is…. 16 Tier 3 Tier 1 Tier 2 OEM Components or detailed parts Manufacture subassemblies Manufacture aircraft sections Final assembly, finish and delivery Tier 1 to : Tier 2 to : Goal: Maintain and Expand our Tier 1 Status Prime to :
Slide 17: CPI Aero's Business Strategy
CPI Aero’s Business Strategy 17 Business Development Initiatives • Expand our capabilities and skills to provide technically superior, competitively priced solution for current and potential customers, focusing on high value, critical structures for wings, engine inlets, and nacelles • Further expan
Slide 18: Well Positioned for Growth
Well Positioned for Growth 18 Military Programs • Well positioned on E - 2D and Black Hawk • Heritage in providing spares support for out - of - production aircraft is aligned with DOD modification and life extension programs • Military MRO capability is hedging against declining number of new aircr
Slide 19: Targets for Growth
Targets for Growth 19 Products / Programs Aircraft structural assembly • Tier 1 Business Jets • Boeing legacy spares • Outsource production • Tip to Tail II • Expand MRO to business jet Aerospace Systems • ISR Systems • Electronic racks Kits and supply chain services • E - 2D • Replicate for commerc
Slide 20: 2015 Focus Areas
2015 Focus Areas 20 EXECUTE • Maintain and grow Tier 1 status • Continuously improve delivery , quality and performance • Capture returns on initial automation GROW • Continued investment in automation and productivity • Replace retiring A - 10 program revenues with new long - term programs • Focus
Slide 21: Large Order Backlog
Large Order Backlog Funded / Unfunded $141.4M $231.4M Funded Unfunded Unfunded backlog represents remaining potential value of long term agreements Defense / Commercial Consolidated Backlog at 9/30/2014 of $372.8 Million $213.0M $159.8M Military Aerospace Commercial 21 Record funded backlog of $ 141
Slide 22: Long-Term Visibility - Contracts
Long - Term Visibility - Contracts (as of 10/31/14) Firm, Funded Contracts Provide Long - Term Revenue Visibility and Operating Leverage NORTHROP GRUMMAN – for the ALMDS Pod NORTHROP GRUMMAN - $195M for the E - 2D and C - 2A aircraft SPIRIT - for the Gulfstream G650 business jet SIKORSKY - $ 17.5M f
Slide 23: Revenue Breakdown
Revenue Breakdown * 68% 57% 61% 32% 43% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2013 Revenue 2014 Revenue (E) 2015 Revenue (E) Military Aerospace Commercial $83.0M $83.5M - $85.0M* $92.0M - $102.0M Commercial • High single digit growth Military • Maintain strong revenue Existing Programs • >
Slide 24: Revenue Breakdown: By Segment
Revenue Breakdown: By Segment 2015 Aerostructures • Flat Kitting & SCM • 30% growth Aerosystems • Doubling 24 * 2014 Revenue is Adjusted. See reconciliation of non - GAAP financial measures to relevant GAAP financial measures in Appendix I. 72% 65% 55% 17% 25% 28% 12% 9% 17% 0% 10% 20% 30% 40% 50% 6
Slide 25: Revenue Breakdown: Subcontractor Role
Tier 1 78% Tier 2 21% Prime 1% 2014 Revenue (E) $83.5M - $85.0M Revenue Breakdown: Subcontractor Role Tier 1 82% Tier 2 16% Prime 2% 2015 Revenue (E) $92.0M - $102.0M 25 * 2014 Revenue is Adjusted. See reconciliation of non - GAAP financial measures to relevant GAAP financial measures in Appendix I.
Slide 26: Investment Thesis
Investment Thesis 26 Large and Diversified Backlog Backlog • Several long - term contracts provide long - term revenue visibility and operating leverage • Estimated to end year with more than $400 million in total backlog Expanding & Improving Capabilities Capabilities • A higher value - added enter
Slide 27: Final Thoughts
Final Thoughts 27 75 Percent of 2015 ( E) revenue from long term contracts we WON as a result of our customer changing suppliers after the initial term 0 Number of long term contracts that were LOST to competitors after the initial term
Slide 28: CPI Aero Financial Overview
28 CPI Aero Financial Overview Vincent Palazzolo Chief Financial Officer
Slide 29: Vincent Palazzolo, Chief Financial Officer
29 Financial Overview Vincent Palazzolo Chief Financial Officer Mr . Palazzolo has been Chief Financial Officer of the Company since May 2004 . From 1988 to 2003 , Mr . Palazzolo was employed by Goldstein Golub Kessler LLP (“GGK”), where he was Audit Partner from 1999 to 2003 . In that role, he mana
Slide 30: Financial Highlights
Financial Highlights Revenue $21.5 million vs. $20.7 million in Q3’13 EPS $0.20 vs. $0.23 in Q3’13 Revenue $19.6 million vs. $61.7 million in 9M’13 EPS $(3.18) vs. $0.64 in 9M’13 30 Booz Allen Q3’14 9 M’14
Slide 31: 2015 Initiatives
2015 Initiatives Strengthen Financial Position Invest in Automation & Robotics Continue to Generate Positive Cash Flow from Operations Further Reduce Overhead & SG&A Expenses • Continue to pay down debt and reduce interest expense • Investments to favorably impact operating efficiencies • Currently
Slide 32: 2015 Business Outlook
2015 Business Outlook 32 Highest Revenue in CPI Aero’s History Revenue $92.0M - $102.0M Gross Margin 19% - 21% Net Income $7.2M to $8.0M Cash Flow $13M - $15M from income tax benefit
Slide 33: 2015 Business Outlook
2015 Business Outlook 33 Over 85% of top line forecast comes from existing programs currently in backlog Military/commercial split remains at approximately 60/40, skewed by expected A - 10 revenue Aerosystems and kitting/supply chain management services combine to account for nearly 70% of total mil
Slide 34: Investments
Investments 34 Capital • Cash flow from operations • Refund / tax credit related to the expected termination of the A - 10 WRP • $35 M Revolving Credit Facility (expandable to $50M) • $4.5 M Term Loan Investments • Facility improvements • Cap - Ex • New programs • Marketing
Slide 35: CPI Aero Manufacturing Technology Roadmap
35 CPI Aero Manufacturing Technology Roadmap Clint Allnach Director, Manufacturing Operations
Slide 36: Clint Allnach, Director, Manufacturing Operations
36 Manufacturing Technology Roadmap Clint Allnach Director, Manufacturing Operations Mr . Allnach joined CPI Aero in 2008 as Senior Program Engineer . In 2011 he became Manager of Engineering, and most recently, Mr . Allnach was named Director of Manufacturing Operations . In this newly created posi
Slide 37: CPI Aero Today
CPI Aero Today 37 Erica Chart 6 years: dynamic revenue growth was mirrored by manufacturing head count and utilized floor space growth
Slide 38: Our Plan for Technology Implementation
Our Plan for Technology Implementation As CPI Aero to continue its transition from … ▪ Tabletop structures to larger, more significant and complex aerostructures ▪ Purely defense to commercial work …… technology upgrade becomes vital to our future Our Goal is to…. 1. Support continued revenue growth
Slide 39: Scalability
Scalability Our Approach . 39 Forecasts & guidance do NOT include contributions from technology based performance improvements Technology Implementation Approach To use proven, mature technologies that minimize risk. Identify a proven technology that can be initially brought in as a complimentary ca
Slide 40: Case Study VMI
Case Study VMI 40 VMI today covers: All shop supplies, all cutting tools , and consumable fasteners in mature workcells One Technology success that is representative of the CPI Aero approach is Vendor Managed Inventory (VMI). VMI is a Lean Technology , which required ERP software adjustments, techno
Slide 41: Case Study VMI Savings
Case Study VMI 41 Labor Savings People Other $ Total $ Procurement Mfg Mgmt Mfg Kitting Quality Material Direct .5 5.5 $672K $1.5M Indirect .5 2.8 1.5 2 $80K $1.1M Total 1 2.8 5.5 1.5 2 $752K $2.6M VMI savings of $2.6 M Annually
Slide 42: Automated Drilling & Riveting
Automated Drilling & Riveting 42 OEM Installation Overview: Machine driven head, drills, applies sealant and installs a fastener in one pass while structure is under high compression. Wide range of available machinery, from the small, simple, semi - automatic and flexible to the very large, fully au
Slide 43: Automated Drilling & Riveting M-Riveter
Automated Drilling & Riveting 43 M - Riveter Video here Overview: Machine can be inserted into several mature workcells . Deployment is flexible. This is not a dedicated machine. Embraer Inlet Sub - assy. Utilizing this technology reduced cycle time from 11.84 to 4.33 hours. Yields ROI in 13 months.
Slide 44: Robotics
Automated Drilling, and/or Drilling and Riveting Automated Metallic Sanding/Polishing Automated Paint/Finish Application Robotics 44 Overview: Develop Automated Robotic Solutions to replace manufacturing tasks currently performed by manual labor. Today at CPI we have opportunities for (3) specific s
Slide 45: Robotics - Drilling
Robotics - Drilling 45 • Leverage established End Arm tools for drilling and potentially drilling/riveting • Concept is to create a Robotic Drilling cell to support several product lines . • Promises reduced cycle times, better quality, higher utilization Add cell stations or additional robots to ce
Slide 46: Robotics & Automation for Sanding / Polishing
Robotics & Automation for Sanding / Polishing 46 • Concept is to create a Robotic Sanding and Polishing cell to support several product lines. • Promises reduced cycle times, better quality , higher utilization, improved EHS conditions CPI Aero Targeted Solutions • Approx . 400 square foot polishing
Slide 47: Robotics & Automation for Painting / Finishing
Robotics & Automation for Painting / Finishing 47 CPI has three paint booths for applying primer and finish coatings to final assemblies : o 80 square foot o 310 square foot paint booth o 840 square foot state - of - the - art , computer controlled paint booth with automatic paint cure cycle CPI Aer
Slide 48: 3D Scanning Systems for Inspection & Reverse Engineering
3D Scanning Systems for Inspection & Reverse Engineering 48 Overview: Much faster then manual point/probe portable CMM’s Non - contact optical metrology technology, such as 3D scanners, quickly scan the entire object in an accurate and dense point cloud. The digital 3D blue print of the object’s geo
Slide 49: 3D Scanning For Inspection & Reverse Engineering
3D Scanning For Inspection & Reverse Engineering 49 • Customers are requiring even more comprehensive inspection and reporting • The Machines CPI Aero has identified are all in use and/or approved by major Aerospace OEM’s • Potential to reduce CMM inspection time and report generation by as much as
Slide 50: 3D Printing for Jigs & Fixtures
3D Printing for Jigs & Fixtures 50 Overview: Utilize 3D printing capability to produce jig and fixture components from durable Polycarbonate, as opposed to traditional metallic or composite fabrication techniques. Not as direct an impact on touch labor, but improves efficiencies by supporting rapid
Slide 51: Business Analytics Software - Lean Workplace
Business Analytics Software - Lean Workplace 51 Overview: Utilizing the vast array of data within your ERP, and supporting systems, create focused, real time metrics and reporting. Software selected and limited licenses acquired Manufacturing dashboard developed and in beta test Non - digital Visual
Slide 52: Ongoing Efforts & Other Possibilities
Ongoing Efforts & Other Possibilities 52 Continuously evaluating and adopting different cutting tools. Recently we are focusing on the latest composite cutting tool technologies and products. Cutting Tools Introduction of an RFID tracking and control system for all shop floor equipment RFID Tracking
Slide 53: ROM Timeline
ROM Timeline 53 Span times from a Notional PO placement to Implementation, with ROM pricing 0 1 2 3 4 5 6 Mini Riveter 1 Mini Riveter 2 Robotic Drilling Robotic Polishing Robotic Painting 3D scanning for Inspection 3D Printing for Tooling Bus Analytics/Lean Workplace Series 3 Series 2 Series 1 1Q16
Slide 54: Summary
Summary 54 Pursuing many near term opportunities for technology insertion to support future revenue growth Pursuing technology solutions that open up and expand marketing and business opportunities to our customers Technology Implementation Approach designed to minimize risk and maximize results Tec
Slide 55: CPI Aero Video Presentation: Our Facility
55 CPI Aero Video Presentation Our Facility
Slide 56: CPI Aero Program Update & Forecast
56 CPI Aero Program Update & Forecast Nazzareno Palmerini Director, Program Management
Slide 57: Nazzareno Palmerini, Director, Program Management
57 Program Updates and Forecast Nazzareno Palmerini Director, Program Management Mr . Palmerini was hired in 2013 as Director of Program Management . Prior to joining CPI Aero, Mr . Palmerini spent 30 successful years at GKN Aerospace, where he held various sales, marketing and program management po
Slide 58: Program Management 2014 Milestones
Program Management 2014 Milestones 58 Customer Milestones o Extended E2/C2 OWP Kits requirements through 2019 o Concluded an order for additional 10 s/s of E2D seats o Fuel Panel contract finalized and delivered with CPI procured components o Achieved full rate deliveries on Gunner Doors o Reached O
Slide 59: Programs: Military Aerospace
Programs (as of 10/31/14): Military Aerospace 59 E - 2D Advanced Hawkeye & C - 2A Greyhound $195M program Structural kits for the wing UH - 60 BLACK HAWK helicopter $84.3M contracts HIRSS module and Gunner Doors assemblies Manufacture fuel panels Military aircraft $10.7M contract Large structural as
Slide 60: Current Military Program: Northrop Grumman E-2D/C-2A
Current Military Program: Northrop Grumman Corp E - 2D/C - 2A 60 Program Info: • Outer Wing Panel • Seats - Pilot, Co - Pilot, (3) Operator OWP: 18 complete shipsets delivered to date • (10) shipsets in WIP to be delivered through 2015 • NTE for (10) shipsets through 2016
Slide 61: Current Military Program: Sikorsky UH-60
Current Military Program: Sikorsky UH - 60 61 HIRSS module Attaches to the rear of the engines Program Info: • HIRSS module • Gunner doors • Outboard Stabilator • Fuel panels Fuel Panel Located inside the Fuel Cell by forward engine Gunner Doors Located for Machine Gunner Double Doors on both sides
Slide 62: Current Military Program: Bell AH-1Z
Current Military Program: Bell AH - 1Z Support and Cowl Assemblies Program Info: • Panel assembly • A filler • A set of inlets • Support assemblies 62 Panel Filler
Slide 63: Current Military Program: UTC
Current Military Program: UTC 63 Program Info: • Contracted for design and build of 10 ship sets of DB - 110 pod structures • CPI Aero has design authority DB - 110 pod structure These images do not contain data subject to ITAR or EAR restrictions.
Slide 64: Current Military Program: Boeing A-10
Current Military Program: Boeing A - 10 64 64 Program Info: • CPI assembles the entire forward section of the wing, along with wingtips, ailerons and trailing edges. Wingtips Forward leading edges Main landing gear pods Landing gear doors Ailerons Wing to fuselage fillets Trailing edge panels 3D REN
Slide 65: Programs: Commercial
Programs (as of 10/31/14): Commercial Gulfstream G650 Business Jet Wing leading edge assemblies Contract extended through 2019 S - 92 Civil Helicopter $28.8M contract Structural assembly kits, search and rescue door provision & completion kits, trailing edge and seat fitting kits HondaJet © Business
Slide 66: Current Commercial Program: Spirit - Gulfstream G650
Current Commercial Program: Spirit – Gulfstream G650 Program Info: • Wing Leading Edge Assemblies • Ship set consists of 28 Assemblies Contract extended thru 2019 66
Slide 67: Current Commercial Program: HondaJet
Current Commercial Program: HondaJet 67 Program Info: • Flaps/Vanes & Engine Inlet Delivered F4 test flight P11 production units in WIP Flaps/Vanes Engine Inlet
Slide 68: Current Commercial Program: Embraer Phenom
Current Commercial Program: Embraer Phenom 300 68 Program Info: • Engine inlet assemblies for Phenom 300 • Ship set consists of one left hand and one right hand unit Engine Inlet
Slide 69: Current Commercial Program: Sikorsky S-92
Current Commercial Program: Sikorsky S - 92 69 Bond Kits Emergency Exit Door ½ Door Assembly Multiple Kits Including Cover, Provision, Installation Kits Program Info: • Bond Kits • Emergency Exit Door • Half - Door Assembly • Multiple Kits
Slide 70: Current Commercial Program: Cessna Citation X
Current Commercial Program: Cessna Citation X 70 Program Info: Wing spar Assemblies Approx. 12 ship sets per year
Slide 71: CPI Aero New Business Opportunities
71 CPI Aero New Business Opportunities Daniel Brown Director, Business Development
Slide 72: Daniel Brown, Director, Business Development
72 New Business Opportunities Daniel Brown Director, Business Development Mr . Brown joined CPI Aero in 2010 as Manager of Business Development . In 2013 , he was appointed Director of Business Development . Mr . Brown has had a successful career in business development, serving in various managemen
Slide 73: Overview
Overview Marketplace analysis CPI Aero resources Sales Pipeline 2014 - 2016 business development strategy and marketing activities Customer Strategies: Commercial Aviation, Business Jet Sector, Military Market Conclusions 1 2 3 4 5 6 73
Slide 74: Market Place Analysis
Market Place Analysis Aerospace is still in growth cycle, dominated by commercial sector Rate increases on large commercial aircraft Heavily focused on low cost procurement On - shoring/near - shoring present new opportunities for CPI Aero Analysis 74
Slide 75: Company Resources and External Resources
Company Resources External Resources Business Development Resources • VP Business Development • Director • Proposal Manager • Sales Engineer • Project Engineer • Estimator • Marketing and Communications Assistant • Consultant (Former VP Sales) 75 • Two 3 rd party sales organizations − Wichita, KS fo
Slide 76: Bid Pipeline: Military / Commercial by Tier
Bid Pipeline (9/30/14) 76 Military / Commercial by Tier 38% 62% Military Prime Tier 1 56% 44% Commercial Tier 1 Tier 2
Slide 77: Bid Pipeline: By Position Within Supply Chain
Bid Pipeline (9/30/14) 77 By Position Within Supply Chain 20% 59% 21% Prime Tier 1 Tier 2
Slide 78: Bid Pipeline: Military & Commercial Platforms
Commercial Platforms Military Platforms Bid Pipeline: Military & Commercial (9/30/14) 78 • F - 35 • ALMDS • TacSAR • T - 38 • AH - 1Z • C - 5 • UH - 60 • G650 • C - Series • 787 • Boeing Legacy spares
Slide 79: Business Development Strategy
Business Development Strategy 2014 - 16 79 Focus on: Prospecting Strategy: • Developing new opportunities with new customers • Developing new product / service offerings • Military – Tier 1 • Military – Prime • Large Commercial: Tier 2 • Regional/Business Aircraft: Tier 1
Slide 80: Marketing Overview (1-year outlook)
Marketing Overview (1 - 3 year outlook) 80 Tier 1s Integrated Aerospace Systems US Defense MRO & aftermarket support Higher level of integration for existing programs Based on our previous contracts, our growth areas are:
Slide 81: Leveraging Client Relationships - Case Study
Leveraging client relationships - Case Study A small initial contract resulted in LTAs worth approximately $100 million Sep 2006 Sep 2006 June 2007 Dec 2010 Feb 2011 Aug 2012 Dec 2012 July 2013 Future Awarded 1 st contract <$25.000 LTA for S - 92 kits $4.1M LTA for S - 92 kits $17.5M Opportunities -
Slide 82: Large Commercial OEM Sourcing Strategy
Large Commercial OEM Sourcing Strategy (1) OEM System Integrators ….. Increased supplier responsibilities Platform assembly Large scale integration Value added parts and assemblies Raw materials • Many direct supplies • No real role for “integrators” • Build to print for parts and sub - assemblies •
Slide 83: Opportunity: Large Aerostructures
Opportunity: Large Aerostructures 83 Boeing (2, 3) • Rate on 737 (including MAX) at 42; increasing to 47/month; then 52/month by 2018 • 787 increasing from 10 to 14/month Spirit Aerosystems • Exploring several opportunities outside current statement of work, in both military and commercial end marke
Slide 84: Opportunity: Large Aerostructures
Opportunity: Large Aerostructures 84 Bombardier (6, 7) • C Series entry into service in 2 nd half 2015 • Global 7000/8000 to be certified in 2016 and 2017 North American - based Tier 1 • In discussion for subassembly on C - Series • If successful, program will enable CPI Aero to obtain Bombardier ap
Slide 85: Biz Jet Customer Strategies
Cessna • Pursuing some major opportunities on new programs (Longitude, Scorpion, etc.) Embraer • Building on success of Phenom 300 to leverage opportunities on Legacy 450/500 Gulfstream • Pursuing other assembly work as Tier 2 through Spirit Biz Jet Customer Strategies 85
Slide 86: Military Customer Strategies
Military Customer Strategies Northrop Grumman • E - 2D program continues to grow, E/A - 18 opportunities as rates drop • Opportunities for ISR Pod sales as they are marketed overseas Lockheed Martin • Have bid on two F - 35 assemblies, exploring others • F - 16 upgrades and mods, FMS Spirit Aerosyst
Slide 87: Military Customer Strategies
Military Customer Strategies Textron • Bell • Cessna Scorpion UTC • ISR Pod structure with integrated systems U.S. DoD • Successful delivery on CH - 53K is expected to lead to further opportunities as program moves to FRP • Pacer Classic • F - 16 SLEP • Trainer 87
Slide 88: Conclusions
Conclusions 88 Large Commercial In commercial market as OEMs ramp up and expand their supply base Business Jet Industry recovery and new offerings expected to create new, high value - added assembly opportunities Defense Structure Well positioned for either prime contractor or Tier 1 Defense Systems
Slide 89: CPI Aero Q & A
89 CPI Aero Q & A Participants Management Investors Analysts
Slide 90: 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 90
Slide 91: Appendix I: Non-GAAP Reconciliations
Appendix I Appendix I Non - GAAP Reconciliations 91
Slide 92: Appendix I: Adjusted Revenue
Appendix I Adjusted Revenue is arrived at by eliminating the affect of the change in estimate on the Company's A - 10 Program with Boeing, and is not derived in accordance with generally accepted accounting principles (“GAAP”) . CPI Aero is using the Adjusted Revenue in evaluating its 2014 financial
Slide 93: Estimated Revenue Range - GAAP to Adjusted
Appendix 1 93 Estimated Revenue Range - GAAP $38,800,000 $40,300,000 Adjustment $44,700,000 $44,700,000 Estimated Revenue Range - Adjusted $83,500,000 $85,000,000 Estimated for the Year Ending December 31, 2014
Slide 94: Notes
Notes ( 1) Airbus - EADS procurement strategy presentation to Ontario Aerospace Council , David Williams, November 2012 ( 2) " Boeing to Increase 737 Production Rate to 52 per Month in 2018." Boeing., October 2, 2014 ( 3) " Boeing's Key Mission: Cut Dreamliner Cost". Jon Ostrower , Wall Street Journ