Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Investor Presentation (March 2013)
31 slides from Cpi Aerostructures's investor presentation, Mar 19, 2013
Slide 1: A Premier Supplier of Aircraft Structure
Investor Presentation March 2013 A Premier Supplier of Aircraft Structure
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: Investment Summary
Investment Summary 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 management, global
Slide 4: Unique Position within Aerospace Supply Chain
Unique Position within Aerospace Supply Chain Differentiated Positioning 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
Slide 5: 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 M
Slide 6: Products: Complex & Critical Flight Structures
Products: Complex & Critical Flight Structures Skin panels, leading edges, flight control surfaces, wing tips, cowl doors, engine nacelle and inlet assemblies, airborne pod structures 6 Fuselage Skin Panels Wing Spar Assys Pod Structures Wing Tips Engine Inlets Trailing Edge & Flaps Engine Cowl Door
Slide 7: CPI Aero's 171,000 Sq. Ft. Facility
CPI Aero’s 171,000 Sq. Ft. Facility
Slide 8: Subcontractor Role
Subcontractor Role ▪Primes are Outsourcing Lower Level Structural Assemblies ▪CPI Aero is a Supplier to: •Bell •Boeing •Cessna •Embraer •Honda •Lockheed Martin •Northrop Grumman •Sikorsky •Spirit AeroSystems •United Technologies Aerospace Systems 0% 20% 40%60%80%100% $0 $30 $60 $90 2004 2005 2006 20
Slide 9: CPI Aero Programs
CPI Aero Programs Aerospace & Defense Military Aerospace Commercial Aerospace Fixed Wing Rotary Wing MRO Pod Systems Rotary Wing Business Jet
Slide 10: 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 10 Pod-based systems VIP Transport Corporate Travel
Slide 11: CPI Aero Programs
CPI Aero Programs ▪ Established presence in a wide range of end- Military markets (military and civilian, fixed wing and rotary wing) ▪ Well positioned on new military platforms that are expected to survive the deep cuts to overall military spending (E-2D Advanced Hawkeye, UH-60M BLACK HAWK) • Herit
Slide 12: Programs: Military Aerospace
Programs: Military Aerospace A-10 Thunderbolt $84M contract Leading edges, wing tips, trailing edges, main landing gear pods for the wing Firm requirements for 117 ship sets Total orders of $48.1M E-2D Advanced& C-2A Greyhound $195Mprogram Structural kits for the wing $57.9M in purchase orders UH-60
Slide 13: Programs: Military Aerospace
Programs: Military Aerospace A-10 Thunderbolt E-2D Advanced& C-2A Greyhound UH-60 BLACK HAWK helicopter Military aircraft AH-1Z ZULU Helicopter13
Slide 14: Programs: Commercial
Programs: Commercial Gulfstream G650 Business Jet Wing leading edges Transitioned from development to production S-92 Civil Helicopter $28.8M contract Structural assembly kits, search and rescue door provision and completion kits, trailing edge and seat fitting kits HondaJet© Business Jet $70M poten
Slide 15: Programs: Commercial
Programs: Commercial Gulfstream G650 Business Jet S-92 Civil Helicopter HondaJet© Business Jet Embraer Phenom300 business jets Cessna Citation X Civilian Jet 15
Slide 16: History of Profitable Growth
History of Profitable Growth Revenue ($ millions) Gross Margin 28 35.6 43.9 44.0 74.1 89.3 0% 5% 10% 15% 20% 25% 30% 0 20 40 60 80 100 2007 2008 2009 2010 2011 2012 Net Income ($ millions) EPS 1.9 2.6 3.9 0.5 7.4 11.0 0 0.4 0.8 1.2 1.6 0 3 6 9 12 2007 2008 2009 2010 2011 2012 16
Slide 17: History of Profitable Growth
History of Profitable Growth * Pre-adjustment - The cancellation of a long term contract resulted in a revenue adjustment. 17 Net Income ($ millions) EPS Revenue ($ millions) Gross Margin 28 35.6 43.9 51.1 74.1 89.3 0% 5% 10% 15% 20% 25% 30% 0 20 40 60 80 100 2007 2008 2009 2010 (pre-adj.)* 2011 201
Slide 18: 2013 Business Outlook
2013 Business Outlook 18 2013 ▪Revenue & earnings expected to be similar to those of 2011 (2nd best year in CPI Aero’s history) ▪Product shipments anticipated to be greater than in 2012 Many programs have transitioned from development to production ▪Projected positive cash flow from operations of ap
Slide 19: Revenue Breakdown
Revenue Breakdown 2012 -Total $89.3 Million 70% 30% Military Aerospace Commercial 2011 -Total $74.1 Million 14% Military Aerospace Commercial 2013E 35% 65% Military Aerospace Commercial 2012 was best year in CPI Aero’s history 2012 commercial aerospace revenue increased 2.6x from 2011 and 3.5x from
Slide 20: Revenue Breakdown: Military
Revenue Breakdown: Military 2011 -Total $63.9 Million 81% 14% 5% Fixed Wing Rotary Wing Pod Systems MRO 2013E 2012 -Total $62.7 Million 76% 11% 13% Fixed Wing Rotary Wing Pod Systems MRO •2012 military aerospace revenue decreased 1.6% from 2011 20 •Estimated greater than 15% decline in 2013 •The onl
Slide 21: Revenue Breakdown: Commercial
Revenue Breakdown: Commercial 21 2011 -Total $10.2 Million 5% 16% Light Bizjet Rotary Wing Large Bizjet 79% 2012 -Total $26.6 Million 17% 22% 61%Light Bizjet Rotary Wing Large Bizjet 2013E 23% 21% 55% 1% Light Bizjet Rotary Wing Large Bizjet Airliner •Commercial aerospace revenue increased 262% from
Slide 22: Long-Term Industry Outlook 2014 and Beyond
Long-Term Industry 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 aligned with DOD modification and life extension pro
Slide 23: Contract Awards
Contract Awards 23 Value of Contract Awards (in $ millions) Military Commercial CPI Aero’s future revenue mix should continue to reflect a larger proportion of work as a subcontractor to major prime contractors 0 30 60 90 2007 2008 2009 2010 2011 2012 55.4 23.4 61.7 37.7 83.6 81.6
Slide 24: Large Order Backlog
Large Order Backlog Funded / Unfunded$52.4M $339.7M Funded Unfunded Unfunded backlog represents remaining potential value of long term agreements Defense/ Commercial Consolidated Backlog at Dec 31, 2012 $392.1 Million $233.5M $158.6M Military Aerospace Commercial Commercial backlog increased more th
Slide 25: Backlog Breakdown (at 12/31/12)
Backlog Breakdown (at 12/31/12) Military Aerospace Commercial Funded: $43.4 Million Unfunded: $ 190.1 Million Funded: $9.0 Million Unfunded: $ 149.6 Million $14.2M $21.6M $0.1M $7.5M $153.8M $31.1M $5.2M Fixed Wings Rotary Wings MRO Pod Systems $4.1M $4.9M $9.1M $140.5M Rotary Wings Business Jet 25
Slide 26: Contracts - Size and Duration
Contracts -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 E2-D and C-2A aircrafts SPIRIT -for the Gulfstream G650 business j
Slide 27: Growth Strategy: Large Commercial Aircraft and Defense Programs
Pursue Subcontracts on Large Commercial Aircraft Expand Relationship with Existing Customers (new program opportunities) Pursue Subcontracts on Future Defense Programs Embraer Boeing Airbus Combat Rescue Helicopter New USAF Trainer New Presidential Helicopter 27
Slide 28: Bid Pipeline
Bid Pipeline Historical Pipeline (in $ million) 28 0 200 400 600 800 1000 12/31/2010 12/31/2011 11/9/2012 486 282 958 Bid Pipeline Composition as of March 13, 2013 64% 4% 20% 11% 1% Commercial Airliner Business Jet Military Fixed Wing Military Rotary Wing Pod Systems Total Commercial 68% Total Milit
Slide 29: Positioned for future growth
Positioned for future growth… •In 2012 raised $13.5M through a public offering –Net proceeds to fund working capital and for other general corporate purposes –Paid down $4 M of revolving credit facility •$39M borrowing capacity in aggregate –Revolving credit facility: In Dec. 2012 increased facility
Slide 30: In Conclusion
In Conclusion 30 2012: Best Year in CPI Aero’s history: •Revenue: up 20.4% to $89.3M •Net Income: up 48.5% to $11.0M •EPS: up 34.6% to $1.40 Sequestration Expected to Impact 2013: •2013 anticipated to be similar to 2011 •Projected positive cash flow from operations of approx. $3M due to higher shipm
Slide 31: Contact us
Contact us CPI Aero structures 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
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