Edgewood-based CPI Aerostructures Inc. on Tuesday reported a net loss of $9.2 million for the first quarter, compared with a net profit of $3.6 million for the year-ago period, as it took a charge related to its work on the A-10 Warthog attack jet.
The company took a one-time, noncash charge of $13.5 million for its jet wing replacement program. It reported sales of $12.7 million for the quarter, down from $19.9 million a year earlier.
Its net loss per diluted share was $1.07 in the first quarter, compared with net income of 11 cents per diluted share in the first quarter of 2015.
The company’s shares fell 34 percent shortly after the market opened, and then recovered some of their losses. The stock closed Tuesday at $5.50, down $1.15, or 17.3 percent. It is down more than 50 percent in the past 12 months.
“The future of the A-10 remains very uncertain,” CPI Aero president and CEO Douglas McCrosson said in a news release. “Despite earlier declarations that the Air Force intended to defer retirement of the aircraft until 2022, it appears now that the Air Force intends to begin retirement much earlier than that.”
McCrosson said CPI Aero believes Congress will not allow the Air Force to retire the A-10 until it finds a suitable replacement, and it believes the Air Force will still need to order new wings.
“However,” McCrosson said in the statement, “we recognize that the quantity and timing of any future orders remain too uncertain for us to consider such anticipated orders in our current financial results.”
McCrosson said CPI Aero’s cash receipts for the remainder of the contract are expected to exceed its cash expenses by about $1.5 million, and the wing replacement program “is expected to have net inflows of cash each quarter through completion in early 2017.”
The quarterly loss caused CPI Aero to fall out of compliance with its credit agreement with two financial institutions. On Monday, the company entered into an amended agreement that accounts for the charge.
On a conference call, McCrosson said in response to a question that if a sufficiently large order eventually comes in, the company would consider reversing the charge.
Since late 2014, McCrosson said in the statement, CPI Aero has announced new defense contracts valued at about $225 million. The new programs, he said, “will begin to positively impact the top and bottom lines during the balance of 2016 through 2020 or beyond in some cases.”