CPI Aerostructures Announces Third Quarter Results; 2004 Guidance Affirmed - A Minimum of $30 Million in Revenue and a Minimum of $3.7 Million in Net Income.EDGEWOOD Edgewood is the name of some places in the United States of America and Canada:
(2) (Counts Per I Aerostructures, Inc. ("CPI") (AMEX AMEX See: American Stock Exchange :CVU CVU Canadian Virtual University CVU Cerner Virtual University CVU Corvo Island, Azores, Portugal (airport code) CVU Case Value Update ) today announced results for the third quarter and nine months ended September September: see month. 30, 2004. Third Quarter 2004 versus 2003: --Revenue of $7,877,023 was slightly ahead of last year's $7,851,067; --Income from operations rose 9.3% to $1,965,399 from $1,798,816; --Gross margin was 34% as compared with 32%, ahead of the Company's 30%-32% gross margin target for 2004; --Net income was $1,325,471 or $0.22 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $1,082,141 or $0.18 per diluted share. (Pro forma net income for 2003 eliminates a non-recurring gain of $41,236 on the sale of certain assets of a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. and provides a provision for taxes at an effective 40% rate). Nine Months 2004 versus 2003: --Revenue increased 2.6% to $21,297,456 from $20,752,731; --Income from operations was $4,601,320, an increase of 6% compared to $4,340,827; --Gross margin was 33% compared with 32%; --Net income was $2,940,482 or $0.48 per diluted share, compared to pro forma net income of $2,527,205 or $0.47 per diluted share. (Pro forma net income for 2003 eliminates non-recurring gains of $2.4 million from the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt related to the repayment of a $4.0 million note and the corresponding accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. at a substantial discount and $461,235 on the sale of certain assets of a discontinued operation and provides a provision for taxes at an effective 40% rate). In preparing the Company's 2003 federal income tax return, the Company determined that there were additional net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. available to apply against income subsequent to 2003. The Company is in the process of analyzing the impact of this availability and the timing of recognition of the benefit. The Company anticipates that it will complete its analysis during the fourth quarter. Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide J. Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. , CPI's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. & President, stated, "Although third quarter revenue was only slightly higher than last year, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose 9.3% due principally to the improvement in gross margin stemming from a richer product mix. As we have been reporting, the government has been slow to issue major contract releases, in part because of aircraft deployments into areas of conflict. As a result, the military aircraft that we support are not in the depots where they can undergo maintenance and modification. The Air Force has advised us that the unused portion of its 2004 aircraft structure budgets has been carried over into 2005. Accordingly, we are hopeful that the balance of the 2004 funding, as well as monies allocated in the 2005 budget, will be released early in 2005, as the postponement of aircraft maintenance and modification should be even more pressing." Mr. Fred went on to say, "The accelerated timetable for the release of our 2005 order, under our 10 year, $61 million contract, for 70 ship-sets of structural inlets for the T-38 Talon trainer supports this assumption. As previously reported, the Air Force has indicated that CPI should expect the accelerated release schedule to continue and for the 2006 order to be in our hands in the fall of 2005. While the 2005 award is the largest annual release we have received to date, there still remains $33.7 million in additional potential orders over the remaining five year life of the contract." Discussing CPI's outlook, Mr. Fred added, "We are confident in meeting our previously stated objectives for revenue and net income of at least $30 million and $3.7 million, respectively. We expect continued growth in 2005 and we have been advised that a release of our 2005 C-5 TOPS order, which as we previously reported may amount to $215 million over seven years, should be issued in the first quarter of 2005. The magnitude and timing of this release could have a dramatic impact on our top and bottom lines in the coming year." CONFERENCE CALL Edward Fred will host a conference call today, November 1, 2004 at 11 am Eastern Time to discuss third quarter results as well as recent corporate developments. After opening remarks, there will be a question and answer period. Interested parties may participate by dialing 706-679-3079. Please call in 10 minutes before the scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas and ask for the CPI Aerostructures call. The conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.cpiaero.com. To access the call, click on the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section, then click on "Events". Please go to the website 15 minutes prior to the call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. The conference call will be archived for approximately 90 days. Founded in 1980, CPI Aerostructures is engaged in the contract production of structural aircraft parts principally for the U.S. Air Force and other branches of the armed forces. In conjunction with its assembly operations, CPI provides engineering, technical and program management services. Among the key programs that CPI supplies are the C-5A C-5A Galaxy (USAF cargo aircraft) Galaxy cargo jet, the T-38 Talon jet trainer and the E-3 Sentry The Boeing E-3 Sentry is a military airborne warning and control system (AWACS) aircraft that provides all-weather surveillance, command, control and communications, to the United States, United Kingdom, France, NATO and other air defense forces. AWACS AWACS (Airborne Warning and Control System) Mobile, long-range radar surveillance-and-control centre for air defense. Used by the U.S. Air Force since 1977, AWACS is mounted in a specially modified Boeing 707 aircraft, with its main radar antenna affixed to a rotating dome. jet. The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI's SEC reports, including CPI's Form 10-KSB for the year ended December 31, 2003 and Form 10-QSB for the quarter ended June 30, 2004. (See Accompanying Tables)
CPI AEROSTRUCTURES, INC.
CONDENSED STATEMENTS OF INCOME
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
Revenue $7,877,023 $7,851,067 $21,297,456 $20,752,731
Income from operations 1,965,399 1,798,816 4,601,320 4,340,827
Other income (expense):
Interest (expense)/other
income 72 4,752 162 (128,818)
Gain on extinguishment
of debt ----- ----- ----- 2,431,233
Gain on sale of
assets held for
sale - discontinued
operations ----- 41,236 ----- 461,235
Income before provision
for income taxes 1,965,471 1,844,804 4,601,482 7,104,477
Provision for income
taxes 640,000 ----- 1,661,000 -----
----------------------------------------------------------------------
Net income $1,325,471 $1,844,804 $2,940,482 $7,104,477
======================================================================
Earnings per common
share - basic $0.25 $0.35 $0.55 $1.50
======================================================================
Earnings per common
share - diluted $0.22 $0.30 $0.48 $1.31
======================================================================
Shares used in computing
earnings per common
share:
Basic 5,405,184 5,217,733 5,358,025 4,730,803
Diluted 6,132,425 6,053,689 6,091,338 5,426,145
----------------------------------------------------------------------
Adjusted Pro Forma removing certain benefits from the comparison
------------------------------------------------------------------
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
Income before provision
for income taxes $1,965,471 $1,844,804 $4,601,482 $7,104,477
Adjustments to remove
non recurring gains:
Gain on sale of assets
held for sale -
discontinued operations ----- (41,236) ----- (461,235)
Gain on extinguishment
of debt ----- ----- ----- (2,431,233)
----------------------------------------------------------------------
Pretax Income excluding
non-recurring gains $1,965,471 $1,803,568 4,601,482 $4,212,009
Tax provision 640,000 ----- 1,661,000 -----
Adjustments to tax
provision to make 40%
effective rate ----- 721,426 ----- 1,684,804
---------- ---------- -------- ---------
Adjusted Net Income $1,325,471 $1,082,141 $2,940,482 $2,527,205
Earnings per common share
- basic $0.25 $0.21 $0.55 $0.53
Earnings per common share
- diluted $0.22 $0.18 $0.48 $0.47
Unaudited Audited
Balance Sheet Highlights 9/30/04 12/31/03
------- --------
Cash $1,543,196 $2,794,310
Total current assets 26,543,929 23,399,350
Total assets 27,269,544 23,939,090
Total current liabilities 3,897,217 4,079,976
Working capital 22,646,712 19,319,374
Short-term debt 63,459 7,303
Long-term debt 127,445 26,311
Shareholders' equity 23,244,882 19,832,803
Total liabilities and shareholders' equity 27,269,544 23,939,090
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