CPI Aerostructures (CVU) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $19.4M, down 4.8% year-over-year; nine-month revenue was $59.3M, down 5.8% year-over-year, mainly due to declines in key military and commercial programs, partially offset by growth in Raytheon NGJ – Mid Band Pods and Collins MS-110 programs.

• Net income for Q3 2024 was $749.7K, up 148.8% year-over-year; nine-month net income was $2.33M, down 4.7% year-over-year.

• Gross margin improved to 21.7% in Q3 2024 from 18.2% in Q3 2023, driven by favorable mix and lower cost of sales.

• Backlog as of September 30, 2024 totaled $506M, with 96% attributable to government and military contracts, bolstered by a new award from a Tier 1 defense contractor.

Financial highlights

• Q3 2024 revenue: $19.4M (down 4.8% YoY); nine-month revenue: $59.3M (down 5.8% YoY).

• Q3 2024 net income: $749.7K (up 148.8% YoY); nine-month net income: $2.33M (down 4.7% YoY).

• Q3 2024 gross profit: $4.22M (up 13.9% YoY); gross margin: 21.7% (up 350 bps YoY).

• Adjusted EBITDA for Q3 2024 was $1.7M, up from $1.4M; nine-month Adjusted EBITDA was $5.5M, down from $5.8M.

• Cash flow from operations was $0.7M in Q3 2024; nine-month cash flow used in operations was $(0.8)M.

Outlook and guidance

• Management expects existing resources to meet working capital needs for at least the next 12 months, but notes variability due to timing of program awards and customer/supplier payment terms.

• Inflation and supply chain risks are actively monitored; most long-term contracts have fixed pricing.

• Management highlighted ongoing success in winning new development programs and expects continued backlog growth.