In an unexpected executive shuffle, Edward Fred, the president and chief executive of aerospace contractor CPI Aerostructures Inc. resigned Thursday and was replaced by the company's chief operating officer, effective immediately.
In a news release, the Edgewood company said Douglas J. McCrosson, 51, had been named to the company's board of directors in addition to assuming the roles of president and chief executive.
Fred, 55, who had led the company for more than a decade, resigned for personal reasons, the company said. He will remain with the company as an adviser until May 16 and as a consultant until Nov. 16.
The executive shift came on the same day the company posted a 22 percent year-over-year decline in revenue to $21.3 million, and a 34 percent decline in net income to $2.4 million for the quarter ended Dec. 31. Diluted earnings per share were 28 cents, versus 43 cents in the year-ago quarter.
McCrosson attributed the lower revenue and net income to a decline in sales for federal government contracts caused by automatic budget cuts known as the sequester. At the same time, he said, the company posted record new business awards of about $122.3 million for 2013.
Shares of CPI Aerostructures fell 51 cents to close at $13.84.
William Wahlig, executive director of the Long Island Forum for Technology, praised Fred's successor, McCrosson, as a leader with a "good business sense" who is committed to Long Island.
Fred, a veteran of Grumman Corp., once the dominant aerospace company on Long Island, joined CPI Aerostructures in February 1995. He was appointed president in January 2002 and chief executive a year later.
In a statement, Fred said, "It has been a privilege to serve as chief executive of CPI Aero, and I will continue to support the company."
CPI Aerostructures' board of directors is chaired by Eric Rosenfeld, the chief executive of Crescendo Partners, an activist hedge fund based in New York City. Rosenfeld and the Crescendo Partners II fund together owned almost 8 percent of CPI Aerostructures shares as of December. Rosenfeld didn't return a call for comment.
One of the company's largest contracts -- making parts for the A-10 Thunderbolt attack jet -- is threatened by a proposal by U.S. Defense Secretary Chuck Hagel to retire the aging aircraft as part of a plan to cut billions from the Pentagon budget.
McCrosson said it was unlikely the A-10 would be scrapped in an election year.
CPI, with a Long Island workforce of more than 270, makes structural aircraft parts for fixed-wing aircraft and helicopters in both the commercial and defense markets.