Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Investor Day (November 2013)
106 slides from Cpi Aerostructures's investor day presentation, Nov 18, 2013
Slide 1: Investor & Analyst Day Presentation
Investor & Analyst Day Presentation November 18, 2013 A Premier Supplier of Aircraft Structure NYSE MKT: CVU
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: Morning Agenda
Morning Agenda 10:00 am – 12:00 noon EXECUTIVE PRESENTATIONS 3 • Edward Fred, Chief Executive Officer and President • Douglas McCrosson, Chief Operating Officer CPI Aero’s Position in the Industry • Robert Muller, Vice President - Program Management • Daniel Brown, Director – Business Development •
Slide 4: Welcome Remarks - Eric Rosenfeld, Chairman
Welcome 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: CPI Aero's Position in the Industry
CPI Aero’s Position in the Industry Speakers Douglas McCrosson Chief Operating Officer Edward Fred Chief Executive Officer & President 5
Slide 6: Edward Fred, Chief Executive Officer and President
Edward Fred Chief Executive Officer and President Mr . Fred has been President of the Company since January 2002 . He was appointed Chief Executive Officer in January 2003 . Prior to being appointed President, Mr . Fred held various positions with the company beginning in February 1995 . For approxi
Slide 7: 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 progra
Slide 8: CPI Aero's 171,000 Sq. Ft. Facility
CPI Aero’s 171,000 Sq. Ft. Facility 8
Slide 9: Expanding Capabilities
Expanding Capabilities 1980s 1990s Early 2000s Late 2000s Currently Going Forward Core Business: Prime Contractor for the U.S. Dept. of Defense Growth of Core Business: Increased Technical Capabilities Large - Scale Manufacturing + Start Pursuing Subcontracting Work (Tier 1 and 2) Expansion into New
Slide 10: 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: • Over 30 years of highly evolved assembly, supply chain and program management sk
Slide 11: Douglas McCrosson, Chief Operating Officer
Douglas McCrosson Chief Operating Officer Mr . McCrosson joined CPI Aero in May 2003 as Director of Business Development . He was promoted to : Vice President of Business Development in January 2006 ; Vice President of Operations in January 2007 ; Senior Vice President of Operations (heading CPI Aer
Slide 12: Unique Position within Aerospace Supply Chain
Unique Position within Aerospace Supply Chain Activities Performed Representative Companies ▪ Design & development of aircraft platforms ▪ Integration & final assembly of completed aircraft ▪ Marketing & supply ▪ Program management ▪ Final assembly of complex & critical flight structures ▪ External
Slide 13: Subcontractor Role
Subcontractor Role Primes are Outsourcing Lower Level Structural Assemblies CPI Aero is…. 13 Tier 3 Tier 1 Tier 2 OEM Components or detailed parts Manufacture subassemblies Manufacture aircraft sections Final assembly, finish and delivery Tier 1 Supplier to: Tier 2 Supplier to:
Slide 14: CPI Aero Programs
CPI Aero Programs Aerospace & Defense Military Aerospace Commercial Aerospace Fixed Wing Rotary Wing MRO Pod Systems Rotary Wing Business Jet 14
Slide 15: CPI Aero Programs End Markets
CPI Aero Programs End Markets Military Aerospace Commercial Aerospace In - Production Aircraft Spares/OOP Service Life Extension MRO Off - shore Energy Exploration & Support Search & Rescue 15 Intelligence, Surveillance & Reconnaissance (ISR) VIP Transport Corporate Travel Foreign Military Sales
Slide 16: Organization Chart
Organization Chart 16
Slide 17: Presentations by Business Development, Program Management & Operations
Presentations by… Business Development, Program Management & Operations 17 Clint Allnach Director, Manufacturing Operations Nazzareno Palmerini Director, Program Management Daniel Brown Director, Business Development Robert Muller VP, Program Management Kenneth Hauser VP, Global Supply Chain
Slide 18: Robert Muller, VP Program Management
Robert Muller VP, Program Management Mr . Muller has over 30 years of aerospace manufacturing experience . He joined CPI Aero in 2007 as the Director of Business Development, and in 2008 , was named Director of Program Management . In 2009 Mr . Muller was appointed Vice President of Program Manageme
Slide 19: Organization Chart - Program Management
Organization Chart Program Management Doug McCrosson Chief Operating Officer Bob Muller VP-Program ‘Management
Slide 20: Business Development and Program Management Overview
Business Development and Program Management Overview Business Development • Focus on : • Developing new customers • Developing new product/service offerings Program Management • Focus on : • Maintaining a high level of customer satisfaction • Expanding business base with current customers Transition
Slide 21: Daniel Brown, Director, Business Development
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 management roles for several companies
Slide 22: Business Development Organization Chart
Business Development Organization Chart 22
Slide 23: Business Development
Business Development 23 I Business Development Organization/Resources II III IV Market Overview and Strategy Business Development Process Transition of Won Programs to Operations
Slide 24: Business Development Resources
Company Resources External Resources Business Development Resources • VP Program Management • Director • Proposal Manager • Sales Engineer • Project Engineer • Estimator • Marketing and Communications Assistant • Consultant (Former VP Sales) 24 • Two 3 rd party sales organizations − Midwest, US Terr
Slide 25: Business Development Strategy
Business Development Strategy 25 Focus on: Marketing Strategy: • Developing new opportunities with new customers • Developing new product / service offerings • Military – Tier 1 • Military – Prime • Commercial: Tier 1 or Tier 2
Slide 26: Bid Pipeline (9/30/13)
Bid Pipeline (9/30/13) 26 Military / Commercial Military 63 % * Commercial 37% Military Commercial * Military bid pipeline percentage shown here includes one high - value proposal to one of the competitors on the USAF T - X Trainer . Excluding this bid, the Bid Pipeline percentages would then be Mil
Slide 27: Military Bid Pipeline
Military Bid Pipeline: Military (9/30/13) 27 Fixed Wing 80% Rotary Wing 13% Pod Systems 3 % MRO 4 % Fixed Wing Rotary Wing Pod Systems MRO
Slide 28: Commercial Bid Pipeline
Commercial Bid Pipeline: Commercial (9/30/13) 28 Light Bizjet 12% Rotary 4% Large Business 58% LCA 26 % Light Bizjet Rotary Large Business LCA
Slide 29: Marketing Overview (1-year outlook)
Marketing Overview (1 - 3 year outlook) What are the Target Areas for CPI Aero for development & growth? 29 European Tier 1s Design and build opportunities within existing customer base US Defense MRO & aftermarket support Higher level of integration for existing programs Based on our previous contr
Slide 30: Bid Preparation Process
Bid Preparation Process 30 Submit to Customer Executive Review and Approval Risk Analysis/Financial Analysis Pricing Develop Capture Strategy/Response Receive RFP Discover Opportunities 1 2 3 4 5 6 7
Slide 31: Bid Preparation: Discover Opportunities
Bid Preparation Customer Engagement • Market intelligence • Sales representatives Government Opportunities • Fed Biz Ops website • Attend government - sponsored Industry Days OEM Opportunities • Existing customers via internal Program Managers • New customers via contacts and meetings with Business
Slide 32: Bid Preparation: Receive RFP
Bid Preparation Official Request for Proposal (RFP) Released Details opportunity Provides date for response Evaluation criteria Quantity Delivery date Receive RFP 2 32
Slide 33: Bid Preparation: Develop Capture Strategy/Response
Bid Preparation Develop Capture Strategy/Response 3 Analyze customer needs and priorities Research – New or existing design – Buying history – Part/Item history Identify CPI Aero’s strengths with respect to opportunity Identify challenges – Workarounds – Subcontract – Investment 33
Slide 34: Bid Preparation: Pricing
Engineering Review Procurement / Labor Pricing Bid Preparation ▪ Identify any unique/complex requirements ▪ Completeness of data package Pricing 4 ▪ Competitive bids for procured items where possible ▪ Brief suppliers for full understanding of RFP (bidders conferences) ▪ Use of advanced software too
Slide 35: Bid Preparation: Risk Analysis/Financial Analysis
Bid Preparation Risk Analysis/Financial Analysis 5 Risk Analysis Financial Analysis 35
Slide 36: Bid Preparation: Executive Review and Approval
Bid Preparation Executive Review and Approval 6 Formal presentation to executive management Reiterate proposal requirements Explain final proposal plan and response Present final pricing 36
Slide 37: Bid Submittal
Bid Submittal 1. Executive summary 2. Approved proposal 3. Pricing as directed by RFP Submit to Customer 7 Potential BAFO received Final Negotiations Conducted by Executive Management Award Time Frame – immediate or months away Documents submitted…. …. then Varies by opportunity and by customer 37
Slide 38: Bid Process Overview
Submit to Customer Executive Review and Approval Risk Analysis/Financial Analysis Pricing Develop Capture Strategy/Response Receive RFP Discover Opportunities x Notice of Selection Award Bid Process Overview x x x x x x 38
Slide 39: Transition to Operations
Transition to Operations Transition Team… ▪ Director ▪ Proposal Manager ▪ Sales Engineer 39 ….responsible for transferring bid data to IPT ▪ Assumptions ▪ Cost Estimates ▪ Engineering Data
Slide 40: Nazzareno Palmerini, Director, Program Management
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 positions, including Director of B
Slide 41: Program Management Organization Chart
Program Management Organization Chart 41
Slide 42: Program Management Overview
Program Management Overview 42 Integrated Program Team (IPT) process on all new and existing programs Responsibility: IPT’s led by a Program Manager (PM) who has overall responsibility for the business unit - supported by members including Engineering, Purchasing, Quality Engineering, Manufacturing
Slide 43: Program Management Flow
New Program Start up • Transition from Business Development to Program Management • Program Manager (PM) forms the Integrated Product Team (IPT) with input from functional Managers • Initial budgets, risk mitigation and project plan established to support customer requirements Transition to Producti
Slide 44: Program Management Metrics and Tools
Profit Customer Satisfaction Sales Delivery Program Management Program Metrics Tools 44
Slide 45: Programs (as of 10/31/13): Military Aerospace
Programs (as of 10/31/13): Military Aerospace A - 10 Thunderbolt Wing $92M contract Leading edges, wing tips, trailing edges, main landing gear pods Firm requirements for 117 ship sets $48.1M orders E - 2D Advanced Hawkeye & C - 2A Greyhound $195M program Structural kits for the wing $51.2M in purch
Slide 46: Current Military Program: Boeing A-10
Current Military Program: Boeing A - 10 46 46 Program Info: • CPI assembles the entire forward section of the wing, along with wingtips, ailerons and trailing edges. CPI has delivered 53 wings to date. Production rate is at 4 wings per month. Wingtips Forward leading edges Main landing gear pods Lan
Slide 47: Current Military Program: Northrop Grumman E-2D/C-2A
Current Military Program: Northrop Grumman Corp E - 2D/C - 2A 47 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 (12) shipsets through 2016 Seats: (2) complete shipset
Slide 48: Current Military Program: Sikorsky UH-60
Current Military Program: Sikorsky UH - 60 48 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 49: Current Military Program: UTC
Current Military Program: UTC 49 Program Info: • Contracted for design and build of 10 ship sets of DB - 110 pod structures • CPI Aero has design authority 1 st Pod structure slated to deliver December 2013 Balance of 9 structures to be delivered in 2014 DB - 110 pod structure
Slide 50: 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 To date, we have delivered all 2013 requirements to include 11 ship sets of the supports assemblies and all scheduled panels assemblies and fillers - al
Slide 51: Programs (as of 10/31/13): Commercial
Programs (as of 10/31/13): Commercial Gulfstream G650 Business Jet Wing leading edge assemblies Contract recently extended through 2019 Funded backlog through Q3 2014 S - 92 Civil Helicopter $28.8M contract Structural assembly kits, search and rescue door provision & completion kits, trailing edge a
Slide 52: Current Commercial Program: Spirit - Gulfstream G650
Current Commercial Program: Spirit – Gulfstream G650 Program Info: • Wing Leading Edge Assemblies • Ship set consists of 28 Assemblies In November 2013, CPI will have shipped the 100 th ship set of Leading Edges Contract extended thru 2019 52
Slide 53: Current Commercial Program: Sikorsky S-92
Current Commercial Program: Sikorsky S - 92 53 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 54: Current Commercial Program: HondaJet
Current Commercial Program: HondaJet 54 Program Info: • Flaps/Vanes & Engine Inlet Delivered F4 test flight P11 production units in WIP Flaps/Vanes Engine Inlet
Slide 55: Current Commercial Program: Embraer Phenom
Current Commercial Program: Embraer Phenom 300 55 Program Info: • Engine inlet assemblies for Phenom 300 • Ship set consists of one left hand and one right hand unit Delivered through ship set 5. Aggressive ramp up schedule requires rate tooling. In June 2014, the program will be delivering 7 ship s
Slide 56: Current Commercial Program: Cessna Citation X
Current Commercial Program: Cessna Citation X 56 Program Info : • Delivered 7 First Article parts • Working the last 4 First Article parts (which are the largest) to be due in January, 2014 Will be in production of all parts in 2014 Approx. 12 ship sets
Slide 57: Kenneth Hauser, VP, Global Supply Chain
Kenneth Hauser VP, Global Supply Chain Mr . Hauser joined CPI Aero in 2011 as Director of Global Supply . In 2013 , he was appointed Vice President of Global Supply Chain . Prior to joining CPI Aero, Mr . Hauser had a successful career spanning 30 years at Northrop Grumman where he held various mana
Slide 58: GSC - Organizational Chart
58 GSC – Organizational Chart
Slide 59: Introduction - GSC
Introduction - GSC Implemented integrated Global Supply Chain organization early in 2013 • Separate SCM functions had existed prior, but reported through several different organizations 59 Performance being optimized - significant improvement over 2012 • Robust processes and tools • Performance Meas
Slide 60: Closed-Loop SCM Process Flow
Closed - Loop SCM Process Flow Supplier Selection and Approval Supplier Requirements Flow - Down Post - Award Review and Surveillance Product Validation Post Delivery 60 Approved Quality System Requirements to Supplier Capabilities Supplier Performance Rating (=/>90%) Non - Conformance Disposition R
Slide 61: Management Tools
Management Tools 61 Supplier Health Assessment • Key / critical suppliers by Program Procurement Dashboard • Buyer / Program level visibility Risks and Issues Closure Plans • Identification & impact • Plan to resolve o Recent supplier issue in Europe
Slide 62: GSC Performance Metrics
GSC Performance Metrics 62 Strategic Sourcing Procurement Product Validation Inventory & Kitting Production Customer Supplier Material Planning Timely Re quisition Release Quality Engineering & Deployment Shipping Effective PO Placement Timely PO Placement Supplier OTD Supplier Quality Cost of Quali
Slide 63: Affordability
Delegated Source Inspection Program for High Performing Suppliers Point of Use / Vendor Managed Inventory Programs • Standard hardware, cutting tools, consumables Low Cost / Non - Domestic Sources of Supply • Require customer level process approvals Third Party Logistics Agreement Affordability 63 x
Slide 64: Clint Allnach, Director, Manufacturing Operations
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 position and departmental organization w
Slide 65: Manufacturing Operations - Organizational Chart
Manufacturing Operations - Organizational Chart 65
Slide 66: Brief History - A Look Back - 2007
Brief History 66 CPI Aero - A Look Back - 2007 Very small company, with little industry recognition or presence outside of the DOD Air Logistics Centers and Depots 95% defense contracts Shop structured and operated to supply the business base mentioned above Minimal customer oversight / interaction
Slide 67: Brief History: 2008 Big Three Contracts
In 2008 CPI Aero awarded initial “Big Three” contracts: • Boeing A - 10 Enhanced Wing Replacement program • Spirit/Gulfstream G650 LE package • E2D Outer Wing Panel (OWP) Kits Brief History 67 Challenged our resources • Infrastructure • Workforce
Slide 68: Capability Growth - 2007 to Today
68 Expanded into Military MRO Growing Commercial Business Complex Structural Assemblies Capability Growth – 2007 to Today Today 1. Engineering Capabilities 2. Tooling Department 3. Manufacturing and Integration
Slide 69: Engineering: CATIA 3D Modeling
Engineering department highlights: Full Integration of CATIA 3D modeling and design capability Engineering 69
Slide 70: Engineering: Reverse Engineering
Engineering 70 Engineering department highlights: “Reverse engineering” expertise for OEMs
Slide 71: Engineering: Configuration Management and Tool Design
Engineering department highlights: Engineering 71 2 Refined procedures and processes to provide robust ERP - driven configuration management Focus on large integration programs and new design start ups 3 1 Tool Design capability
Slide 72: Engineering: Configuration Resource for OEMs
Configuration resource for OEM’s to correct their PO’s Proprietary Proprietary Proprietary Engineering 72 Executed our first contract with Design and Fabrication
Slide 73: Our Engineers
Mix of seasoned, experienced engineers and recent hires Our Engineers 73 Comprehensive skill set and capabilities Rapid growth in personnel and contract programs results in intensive on - the - job training for new engineers Diverse educational backgrounds • Industrial Engineering • Applied Physics
Slide 74: Tooling Department
Fully capable and functioning internal tool capability comparable to Tier 1s and OEMs Tooling Department 74 2011 – Established Dedicated Tooling Department State of the art devices • Portable metrology FARO CMM Arms • Laser Metrology Inspection, calibration and repair of all shapes and sizes (from b
Slide 75: Tooling Department: Precision Machining
Adding precision machine capability to allow for in - house tool maintenance, small tool fabrication and even some high precision production support Tooling Department 75 • Dedicated tool control database • Tracking of all internal tooling to support periodic inspection and maintenance • Point of us
Slide 76: Manufacturing & Integration
Manufacturing Department growth in conjunction with Engineering growth and expansion Diverse employee skill levels Need for immediate productivity from new and/or less experienced employees/apprentices Instituted development of highly detailed illustrated work instructions • Generated by Engineering
Slide 77: Manufacturing & Integration: Electronic Controls
Electronic controls allow for cost and efficiency data collection • Defined as routings within Engineering • Mirrors the work instruction flow • Bar coded travelers • Deployed MES system Manufacturing & Integration 77
Slide 78: Manufacturing & Integration: Data Collection
Manufacturing & Integration 78 Data collection and review provides insight to: Adjust workflow Improve fabrication cost performance
Slide 79: Manufacturing & Integration: Digital Call Board
Use of digital call board and personal tablets for efficiency Manufacturing & Integration 79 Inspectors Provide constant in - process quality oversight and checking
Slide 80: Manufacturing & Integration: Kitting
Kitting Supports CPI Aero efforts to bid on greater variety of work packages Manufacturing & Integration 80 Coordination of supply chain expertise with minimal manufacturing effort Generates revenue with limited impact to shop floor
Slide 81: Apprentice Program
• Defined training syllabus • Rapid rate to a point of meaningful production contribution (average 8 - 10 weeks) • Mentoring program • 95% graduation rate Manufacturing & Integration 81 Apprentice Program Provides steady stream of manpower to cover attrition and support continued steady growth
Slide 82: Effects of Successful Apprentice Program
0 20 40 60 80 100 120 2007 2008 2009 2010 2011 2012 2013 Effects of Successful Apprentice Program During rapid growth of workforce, median manufacturing age went down and hourly labor rate held steady Manufacturing & Integration Mechanic head count Median age Hourly labor rate 54 41 14 118 82
Slide 83: Lean Manufacturing
Lean Manufacturing Continued implementation of advanced lean manufacturing practices • IT Department integrated solutions • Customer participation Looking Ahead 83
Slide 84: Automation Technologies
Automation Technologies Stepped approach ▪ Assimilate ▪ Optimize ▪ Evaluate ▪ Increase scope Looking Ahead 84
Slide 85: Lunch and Facility Tour
Lunch and Facility Tour 12:00 noon – 1:45 pm Meet our program managers, engineers, technicians and mechanics See our assemblies: skin panels, leading edges, flight control surfaces, wing tips, cowl doors and engine inlets 85
Slide 86: Meet our Program Managers and Engineers
Meet our Program Managers and Engineers Mike Wilbert Derick Martin Rob Isoldi Dan Gray Jessica Hill Tour of our 171,000 Sq. Ft. Facility Anthony Sigona Mary Zembis 86 Konrad Strumidlo Charles Munna Tom Luizzi
Slide 87: Afternoon Agenda
Afternoon Agenda 1:45 pm – 3:30 pm EXECUTIVE PRESENTATIONS 87 • Vincent Palazzolo, Chief Financial Officer Financial Highlights and Analysis • Edward Fred, Chief Executive Officer and President Industry Outlook and Closing Remarks
Slide 88: Vincent Palazzolo, Chief Financial Officer
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 managed all aspects of the
Slide 89: 9M '13 Results: In Line with Expectations
9M ’13 Results: In Line with Expectations 89 Highlights Revenue Gross margin Pre - tax income Net Income EPS 9M’13 $61.7 million 21.3% $7.8 million $5.4 million $ 0.63 9M’12 $61.9 million 26.7% $10.8 million $7.4 million $ 0.96 * Diluted earnings per share for 2013 nine month period were calculated
Slide 90: 2013E Revenue Breakdown
2012 Total $89.3 Million 70% 30% Military Aerospace Commercial 2011 Total $74.1 Million 86% 14% Military Aerospace Commercial 2013E Revenue Breakdown 90 • 2012 was best year in CPI Aero’s history • 2012 commercial aerospace revenue increased 2.6x from 2011 and 3.5x from 2010 67% 33% Military Aerospa
Slide 91: 2013E Revenue Breakdown: Military
2012 Total $62.7 Million 76% 11% 13% Fixed Wing Rotary Wing Pod Systems MRO 2011 Total $63.9 Million 81% 14% 5% Fixed Wing Rotary Wing Pod Systems MRO • 2012 military aerospace revenue decreased 1.6% from 2011 2013E Revenue Breakdown: Military 91 • The only segment anticipated to decline is fixed wi
Slide 92: 2013E Revenue Breakdown: Commercial
2012 Total $26.6 Million 17% 22% 61% Light Bizjet Rotary Wing Large Bizjet 2011 Total $10.2 Million 5% 16% Light Bizjet Rotary Wing Large Bizjet 79 % 2013E Revenue Breakdown: Commercial 92 • Project entry into large commercial aircraft market 13% 5% 81% 1% Light Bizjet Rotary Wing Large Bizjet Airli
Slide 93: Fixed Asset Analysis
$305,703 $201,964 $58,568 $34,574 Machinery & Equipment Computer Furnitures & Fixtures Leasehold Improvements $200,000 $120,000 $25,000 $338,000 Fixed Asset Analysis Additions for 2013 (through 9/30/13) Projected additions for 2014 93
Slide 94: Cash Flow Analysis
Cash Flow Analysis (10,000,000) (8,000,000) (6,000,000) (4,000,000) (2,000,000) 0 2,000,000 4,000,000 Sept. 30, 2013 Oct. 31, 2013 Projected for 2013 year-end 94 Cash Flow
Slide 95: Significant Balance Sheet Accounts
Significant Balance Sheet Accounts 9/30/2013 10/31/2013 Accounts Receivable 13,317,866 8,568,170 Cost and estimated earnings in excess of billings on uncompleted contracts 111,766,149 109,786,649 Accounts payable 7,299,757 5,400,069 Line of credit 31,450,000 26,950,000 95
Slide 96: Edward Fred, Chief Executive Officer and President
Edward Fred Chief Executive Officer and President Mr . Fred has been President of the Company since January 2002 . He was appointed Chief Executive Officer in January 2003 . Prior to being appointed President, Mr . Fred held various positions with the company beginning in February 1995 . For approxi
Slide 97: Long-Term Industry/Company Outlook
Favorable long - term market outlook Long - Term Industry/Company Outlook 2014 and Beyond Military Programs • Well positioned on new military platforms that are expected to survive the deep cuts to overall military spending • Heritage in providing spares support for out - of - production aircraft is
Slide 98: Contract Awards
Contract Awards 98 Value of Contract Awards (in $ millions) CPI Aero’s future revenue mix should continue to reflect a larger proportion of work as a subcontractor to major prime contractors 0% 20% 40% 60% 80% 100% $0 $30 $60 $90 2007 2008 2009 2010 2011 2012 10/31/2013 Military Commercial % of Subc
Slide 99: Large Order Backlog
Large Order Backlog Funded / Unfunded $102.5M $ 337.2M Funded Unfunded Unfunded backlog represents remaining potential value of long term agreements * Defense / Commercial Consolidated Backlog at 9/30/2013 $439.7 Million (increased by $47.8M as compared to 12/31/12) $188.1M $251.6M Military Aerospac
Slide 100: Backlog Breakdown (at 9/30/13)
Backlog Breakdown (at 9/30/13) Military Aerospace Commercial Funded: $73.6 Million Unfunded: $ 178.0 Million Funded: $28.9 Million Unfunded: $159.2 Million $54.1M $12.1M $ 0.3M $7.1M $ 146.3M $26.9M $4.8M Fixed Wings Rotary Wings MRO Pod Systems $6.3M $22.6M $4.1M $ 155.1M Rotary Wings Business Jet
Slide 101: Contracts (as of 9/30/13) - Size and Duration
Contracts (as of 9/30/13) - Size and Duration Firm, Funded Contracts Provide Long - Term Revenue Visibility and Operating Leverage ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 NORTHROP GRUMMAN – 25 ALMDS units NORTHROP GRUMMAN - $195 M for the E - 2D and C - 2A aircrafts SPIRIT - for the
Slide 102: Additional Growth Opportunities
Pursue Subcontracts on Large Commercial Aircraft Expand Relationship with Existing Customers (new program opportunities) Additional Growth Opportunities Embraer Boeing Airbus Pursue Subcontracts on Future Defense Programs 102 Future Light Helicopter New USAF Trainer New Presidential Helicopter
Slide 103: Setting Record Straight on Commercial Aircraft Opportunity
103 Setting Record Straight on 787 Commercial Aircraft Opportunity • Opportunity was not awarded to a competitor • Work was kept in house by large international manufacturer - They did not receive anticipated new contract that would have required open floor space • Potential new customer neither vis
Slide 104: What Have You Learned About CPI Aero Today?
104 What Have You Learned About CPI Aero Today? Facility: A “real” aerospace company Processes: CPI Aero does it like all the major aerospace companies, just on a smaller scale Programs: The ones we have, and how we get new ones Business Model: Explains no vertical integration The People: Senior Man
Slide 105: Participants - Q&A Session
Participants Management Board Members Program Managers Investors Analysts Q&A Session Thank You 105
Slide 106: Contact us
Contact us CPI Aerostructures Vincent Palazzolo, CFO (631) 586 - 5200 www.cpiaero.com Investor Relations Counsel The Equity Group Inc. Lena Cati (212) 836 - 9611 lcati@equityny.com www.theequitygroup.com 106