Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Midwest IDEAS Conference 2014
25 slides from Cpi Aerostructures's conference presentation, Aug 26, 2014
Slide 1: Investor Presentation – Midwest IDEAS Conference
Investor Presentation Midwest IDEAS Conference August 2014
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements that invoNe 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 st
Slide 3: About CPI Aero: Products and Services
About CPI Aero: Products and Services Manufacturer of aerospace structural assemblies and integrated systems for commercial and military markets Engine Cow! Doors Crew Seats Fuel tems: Engine inlets pears ) Wing Wing SparAssys ene Edge ISR Pod Systems Fuselage Skin Panels Aircraft structural assembl
Slide 4: Aerospace supply chain position: Tier 1 supplier
oct Components or Manufacture Manufacture aircraft —_Final assembly, finish detailed parts subassemblies sections and delivery Tier 1 Supplier to: Bel is BOEING t | | RG TC Aerospace systems “rrner |
Slide 5: OEM Sourcing Strategy
OEM Sourcing Strategy ..... Increased supplier responsibilities | __Fast__ Now Model Platform assembly, Large scale rmegrtion Ny & Make-to - print parts and assembly wit —= —= -—= — + Many direct supplies) (- Fewer, but still + No real rolefor many direct “integrators” supplies + Build to printfor +
Slide 6: 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: eg Competence + Over 30 years of highly evolved assembly, supply chain and progr
Slide 7: CPI Aero's Strategic Objectives
CPI Aero’s Strategic Objectives Continued improvement and expansion of capabilities is vital to CPI Aero’s future Enhance capabilities Completed a major overhaul of our ERP system and Provide best possible buying increased our efficiency experience Increased our workforce and Balance between commerc
Slide 8: Programs (as of 6/30/14): Military Aerospace
Programs (as of 6/30/14): Military Aerospace a woe oe See Xp UTC Aerospace Systems mol! t= ‘AAO Thunderbolt Wing E-2D Advanced UH-60 BLACK Military aircraft Hawkeye &C-2A HAWK helicopter Greyhound M coni ‘AH-AZ ZULU Helicopter Various assemblies Leading edges, wing tips, trailing edges, ‘main landin
Slide 9: Programs (as of 6/30/14): Commercial
Programs (as of 6/30/14): Commercial y al SPIRIT ty Storsty ~€ emenace colle Gulfstream G650 $-92 Civil HondaJet© Embraer Phenom Cessna Citation Business Jet Helicopter Business Jet 300 business jets ‘X+ Civilian Jet mn $70M potential $50M potential © $41M potential value value value Wingleadingedge
Slide 10: Contracts (as of 6/30/14) - Size and Duration
Contracts (as of 6/30/14) - Si ize and Duration Firm, Funded Contracts Provide Long-Term Revenue Visi "1-12 0«13— 14 ‘07 ‘08 ‘09 ‘10 “06 SIKORSK\ —>} =o SIKORSKY - $17.50 ee NORTHROP GRUMMAN - LAMDS Pods = ee ee ‘SPIRIT -for the Gulfstream G650 business jet = eee NORTHROP GRUMMAN - $1951 for the E-2
Slide 11: Leveraging client relationships - Case Study
Leveraging client relationships - Case Study Sikorsky: 2006 to 2014 Future Opportunities ~ Combat ~ Rescue Helicopter Awarded 1 LTA for 8-92 LTA for $-92 MRO LTA for the ~ Presidential contract kits kits a uae ~ Turkish Utility Helicopter <$25.000 $4.1M $17.5M - JMR Sep Sep Dec 2006 2006 2010 45 HIR
Slide 12: Large Order Backlog
Large Order Backlog Consolidated Backlog at 6/30/2014 of $390.7 Million Expects to end 2014 with a record funded backlog — over $110.4M and “book-to-bill” ratio > 1 Funded / Unfunded Defense / Commercial Unfunded backlog represents remaining potential value of long term agreements qs 9D = Funded = U
Slide 13: Bid Pipeline: Breakdown
Bid Pipeline: Breakdown Non-military is 40% of pipeline Military Commercial Large Light Pod MRO Business Bizjet Systems Fixed Wing Lea Rotary Wing LL 13
Slide 14: Additional Growth Opportunities
Additional Growth Opportunities Expand Relationship with Existing Customers (new program opportunities) Gy Storsi__omnereunnen re aerospace Systems Bs! 7 ee 4 seint> —woLine = -€ emomen Pursue Subcontracts on Large Commercial Aircraft New Presidential Helicopter
Slide 15: Financial Highlights
Financial Highlights On an adjusted basis * Q2 & 6M 2014 results were in line with expectations Q2’14 6M’14 Revenue Revenue $21.0 million $42.9 million vs. $21.1 million vs. $41.0 million in Q2113 in6M’'13 EPS $0.20 EPS $0.41 vs. $0.21 in Q2'13 vs. $0.41 in 6M’13 * See reconciliation of non-GAAP fin
Slide 16: Company Outlook
Company Outlook CPI Aero in 2014 and Beyond Favorable long-term industry outlook Military Programs Well positioned on E-2D, Black Hawk military platforms that are expectedto survivethe deep cuts to overall military spending . Heritage in providing spares support for out- $250 of-production aircraft
Slide 17: 2014 Business Outlook
2014 Business Outlook * Revenue Production rates & deliveries EBITDA Cash flow from operations Projected to be between $83.5 million — $85.0 million Newer commercial programs expected to generate a higher % of total revenue Product deliveries expected to increase by 10% ... our highest ever Expected
Slide 18: 2015 Business Outlook
2015 Business Outlook Cash flow from EBITDA Projected record: $90.5 million - $94.0 million + Anticipated single digit growth in military revenue + Anticipated double digit growth in commercial revenue (42% of total revenue) Continued strength in production rates of business jet programs is expected
Slide 19: Investment Case
est! Case Current contracts an’ future revenue ated to generate $390 Commercial platforms providing growth and revenue visi (4) Commercial margins anticipated to improve as rates increase 5. Investment in technology to improve pricing and expand margins
Slide 20: Appendix I: Non-GAAP Reconciliations
Appendix | Appendix | Non-GAAP Reconciliations CPL “8
Slide 21: Appendix I
Appendix | Adjusted Revenue, Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS (‘Key Metrics”), arrived at by eliminating the affect of the change in estimate on the Company's A-10 Program with Boeing, are not derived in accordance with generally accepted accounting principles (“GAAP”). CP
Slide 22: Adjusted Statements Of Operations
Adjusted Statements Of Operations Revenues Cost of sales Gross profit (loss) Selling, general and administrative expenses Income (loss) from operations ‘Other income (expense), net Interest expense Income (loss) before provision for (benefit from) income taxes (Benefit from) provision for income tax
Slide 23: Adjusted Statements Of Operations
Adjusted Statements Of Operations Revenues Cost of sales Gross profit (loss) Selling, general and administrative expenses Income (loss) from operations ‘Other income (expense), net Interest expense Income (loss) before provision for (benefit rom) income taxes (Benefit from) provision for income taxe
Slide 24: EBITDA Reconciliation
EBITDA Reconciliation ... with Projected Adjusted Net Income Range for the Year Ending December 31, 2014 SS Net Income 6,603,000 7,024,000 Provision for income taxes 2,966,000 3,156,000 Interest expense 548,000 450,000 Depreciation and amortization 750,000 750,000 Stock based compensation 450,000 45
Slide 25: CPI Aerostructures
CPI Aerostructures Vincent Palazzolo, CFO ies 586-5200 Investor Relations BES kenge OUT GROUP Lena Cati (212) 836-961