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CPI Aerostructures reports lower revenue, higher profit

Aircraft parts are manufactured on the factory floor

Aircraft parts are manufactured on the factory floor at CPI Aerostructures, March 6, 2012. Credit: Jeremy Bales

CPI Aerostructures Inc. Tuesday reported lower fourth-quarter revenue, but a higher profit, as the year-earlier figures were depressed by a charge related to a discontinued program for the A-10 Warthog jet.

The Edgewood manufacturer of structural assemblies for fixed-wing aircraft, helicopters and airborne surveillance pod systems posted revenue of $24.3 million for the quarter ended Dec. 31 versus $31.6 million in the year-earlier period.

Net income was $2.1 million, or 24 cents per diluted share, versus $651,680, or 8 cents per diluted share, in the 2015 quarter.

Shares of CPI Aerostructures fell 14.2 percent to close Tuesday at $7.25 on the New York Stock Exchange. They are down nearly 12 percent in the past 12 months.

In 2014 the Pentagon announced plans to retire the A-10 Warthog fleet and halt a wing-replacement program in which CPI operated as a subcontractor to Boeing Co. The Defense Department later reversed course and said operations of the A-10, a ground-support attack jet, would continue through 2021.

Chief executive Douglas McCrosson said in a statement Tuesday the A-10 wing replacement program could be revived under the Trump administration, but there was “too much uncertainty” to include that program in the company’s 2017 forecast.

CPI chief financial officer Vincent Palazzolo said “a little pain” from the A-10 depressed margins for CPI in the fourth quarter of 2015, but those charges ended in the first quarter of 2016.

The company is forecasting revenue of $82.5 million to $87 million for 2017 and pretax income of $8.1 million to $8.5 million.

“The new Administration and Congress have indicated a disposition towards increasing defense funding levels,” McCrosson said in a statement. “However, we are five months into the 2017 government fiscal year without a signed 2017 Defense Appropriations Bill ... This is creating uncertainty in the timing of awards for certain defense programs.”


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