CPI AeroStructures Inc. Files 2023 Annual Report (10-K)

TL;DR

<b>CPI AeroStructures Inc. has filed its 2023 10-K annual report detailing its financial performance and operational status.</b>

AI Summary

CPI AEROSTRUCTURES INC (CVU) filed a Annual Report (10-K) with the SEC on April 8, 2024. CPI AeroStructures Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The company operates in the Aircraft Part & Auxiliary Equipment, NEC industry (SIC 3728). CPI AeroStructures is incorporated in New York and its principal business address is in Edgewood, NY. The filing covers the period from January 1, 2023, to December 31, 2023. Key financial data and operational details for the fiscal year 2023 are presented in the report.

Why It Matters

For investors and stakeholders tracking CPI AEROSTRUCTURES INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of CPI AeroStructures' financial health, operational activities, and strategic positioning for the fiscal year 2023, which is crucial for investors and stakeholders to assess the company's performance and future outlook. As a supplier of structural components and systems for commercial, military, and general aviation aircraft, the details within this report are vital for understanding the company's role in the aerospace supply chain and its exposure to industry trends and risks.

Risk Assessment

Risk Level: medium — CPI AEROSTRUCTURES INC shows moderate risk based on this filing. The company operates in the aerospace industry, which is subject to significant regulatory oversight, technological advancements, and cyclical demand, as evidenced by the nature of its business as a supplier of aircraft parts and systems.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand CPI AeroStructures' revenue streams, profitability, and potential challenges in the aerospace sector.

Key Numbers

• 2023-12-31 — Fiscal Year End (Fiscal Year End)
• 2024-04-08 — Filing Date (Filed as of Date)
• 2023-01-01 — Reporting Period Start (Fiscal Year)
• 2022-12-31 — Prior Year End (Fiscal Year)

Key Players & Entities

• CPI AEROSTRUCTURES INC (company) — Filer
• 20231231 (date) — Conformed Period of Report
• 20240408 (date) — Filed as of Date
• 0000889348 (company) — Central Index Key
• NY (location) — State of Incorporation
• 11717 (location) — Business Address ZIP
• 5165865200 (phone) — Business Phone
• 1934 Act (regulation) — SEC Act

FAQ

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-04-08: Filing Date — Date the 10-K report was officially filed with the SEC.

Key Financial Figures

• $3.89 — ce on NYSE American on June 30, 2023 of $3.89) held by non-affiliates of the registra
• $6.0 million — tracts. Our Customers Approximately $6.0 million and $6.1 million of our revenue for the
• $6.1 million — tomers Approximately $6.0 million and $6.1 million of our revenue for the years ended Dece
• $7.9 million — n 2007. In 2008, we received an initial $7.9 million order from NGC to provide structural ki
• $98 million — he long-term agreement at approximately $98 million over an eight-year period, with the pot
• $195 million — , with the potential to be in excess of $195 million over the life of the aircraft program.
• $47.5 million — ear award valued at up to approximately $47.5 million. In June 2020, we announced that we had
• $43 million — eceived firm orders valued in excess of $43 million and $5 million in long-lead funding in
• $5 million — ers valued in excess of $43 million and $5 million in long-lead funding in anticipation of
• $11 million — ditional orders valued at approximately $11 million. Since 2008, the cumulative orders we h
• $209 million — rogram through December 31, 2023 exceed $209 million. We anticipate shipping against these o
• $20 million — rogram for the JASDF to be in excess of $20 million. CPI completed deliveries in support of
• $4 million — s subsidiary WMI received approximately $4 million in purchase orders from NGC to produce
• $1 billion — stralian Air Force. Raytheon received a $1 billion sole source contract from the U.S. Navy
• $60 million — rders received were valued in excess of $60 million and completed delivery as of December 3

Filing Documents

• cpi-10k_123123.htm (10-K) — 1124KB
• ex4-1.htm (EX-4.1) — 12KB
• ex21.htm (EX-21) — 2KB
• ex23-1.htm (EX-23.1) — 2KB
• ex31-1.htm (EX-31.1) — 8KB
• ex31-2.htm (EX-31.2) — 8KB
• ex32-1.htm (EX-32.1) — 5KB
• ex97.htm (EX-97) — 21KB
• cpi10k123123001.jpg (GRAPHIC) — 5KB
• 0001999371-24-004537.txt (&nbsp;) — 5987KB
• cvu-20231231.xsd (EX-101.SCH) — 46KB
• cvu-20231231_cal.xml (EX-101.CAL) — 82KB
• cvu-20231231_def.xml (EX-101.DEF) — 169KB
• cvu-20231231_lab.xml (EX-101.LAB) — 360KB
• cvu-20231231_pre.xml (EX-101.PRE) — 309KB
• cpi-10k_123123_htm.xml (XML) — 826KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 3 PART I 3 Item 1.

BUSINESS

BUSINESS 3 Item 1A.

RISK FACTORS

RISK FACTORS 12 Item 1B UNRESOLVED STAFF COMMENTS 19 Item 1C CYBERSECURITY 19 Item 2.

PROPERTIES

PROPERTIES 20 Item 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 20 Item 4. MINE SAFETY DISCLOSURES 20 PART II 20 Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 20 Item 6. [RESERVED] 21 Item 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21 Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 25 Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 25 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 25 Item 9A

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 25 Item 9B. OTHER INFORMATION 26 Item 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 26 PART III 26 Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 26 Item 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 26 Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 26 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 26 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 26 PART IV 26 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 26 Item 16. FORM 10-K SUMMARY 28 INDEX TO FINANCIAL STATEMENTS F-1 2 FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this Annual Report on Form 10-K and in future filings by us with the Securities and Exchange Commission ("SEC"), the words or phrases "believe", "intend", "plan", "will", "will likely result", "we expect", "could", "will continue", "anticipated", "estimated" or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties. There can be no assurance that future developments will be those that have been anticipated. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Further, such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Numerous factors, including the risk factors described in "Item 1A: Risk Factors" in this Annual Report on Form 10-K, could cause our actual results to differ materially from those expressed in our forward-looking statements. We assume no obligation to revise or update any forward looking statements for any reason except as required by law. The forward-looking statements contained

BUSINESS

Item 1. BUSINESS General CPI Aerostructures, Inc., including its wholly owned subsidiary Welding Metallurgy, Inc. ("WMI") and Compac Development Corporation, a wholly owned subsidiary of WMI (collectively, "CPI Aero", the "Company", "us", or "we") is a manufacturer of structural assemblies, integrated systems, and kitted components for the domestic and international aerospace and defense ("A&D") markets. Our products are generally used by customers in the production of fixed wing aircraft, helicopters, electronic warfare ("EW") systems, intelligence, surveillance, and reconnaissance ("ISR") systems, missiles, and other sophisticated A&D products. We are primarily a Tier 1 supplier to Original Equipment Manufacturers ("OEMs"). We are also a Tier 2 supplier to larger Tier 1 manufacturers and a prime contractor to the United States ("U.S.") Department of Defense ("DOD"), primarily the U.S. Air Force ("USAF"). Our products are used by OEMs within both commercial aerospace and national security markets. In addition to our assembly operations, we provide manufacturing engineering, program management, supply chain management, kitting, and maintenance repair and overhaul ("MRO") services. CPI Aero has over 43 years of experience as a contractor. Our team possesses extensive technical expertise, program and supply chain management, and integration capabilities. Our competitive advantage lies in our ability to offer large contractor capabilities with the flexibility and responsiveness of a small company, while staying competitive in cost and delivering superior quality products. We maintain a website located at www.cpiaero.com . Our corporate filings, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and reports filed by our officers and directors under Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any amendments to those filings, are availab

Business

Business Strategy CPI Aero is committed to achieving revenue, gross profit margin, and earnings growth through the successful implementation of our business development strategy. CPI Aero's future strategic direction is tied to aerostructures, aerosystems, supply chain, and kitting services, and a deeper market penetration of formerly acquired businesses in welding, tube bending, wire harnesses, and electronics. To accomplish this strategy, we are focused on executing on our current customer programs while pursuing new aerospace build-to-print opportunities - in both new production and MRO statements of work. We believe that there has been a shift in the market for more build-to-print contracts by OEMs versus the recent past trend of design and build contracts. This trend fits in well with CPI Aero's strengths. In addition, we expect to identify and close contracts for which we can provide more value added content to our customer (like integrating sub-assemblies into higher level Aerostructures and Aerosystems statements of work) and we intend to pursue statements of work that require proportionately higher CPI Aero value added content. Another tenet of the CPI Aero business development strategy is portfolio reshaping of our existing business by identifying and closing long-term agreements or multi-year contracts, which provides an opportunity to firm-up supplier agreements and secure supplier capacity. The final element of CPI Aero's business development strategy is to build upon the Company's existing customer relationships and to develop relationships with new customers. We intend to increase customer engagements by deploying our business development personnel to solidify existing customer relationships which have been established by performance excellence, transparency and trust over many years and multiple programs. We have also added additional resources to our business development function to cultivate new relationships with new customers. 4 We wil

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