EXHIBIT 99.1
[CPI LOGO OMITTED]
FOR IMMEDIATE RELEASE
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, NY - NOVEMBER 1, 2004 -- CPI Aerostructures, Inc. ("CPI") (AMEX: CVU)
today announced results for the third quarter and nine months ended September
30, 2004.
THIRD QUARTER 2004 VERSUS 2003:
o Revenue of $7,877,023 was slightly ahead of last year's $7,851,067;
o Income from operations rose 9.3% to $1,965,399 from $1,798,816;
o Gross margin was 34% as compared with 32%, ahead of the Company's
30%-32% gross margin target for 2004;
o Net income was $1,325,471 or $0.22 per diluted share, compared to 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 and provides a
provision for taxes at an effective 40% rate).
NINE MONTHS 2004 VERSUS 2003:
o Revenue increased 2.6% to $21,297,456 from $20,752,731;
o Income from operations was $4,601,320, an increase of 6% compared to
$4,340,827;
o Gross margin was 33% compared with 32%;
o 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 of debt related to the repayment of a
$4.0 million note and the corresponding accrued interest 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 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.
(more)
CPI Aerostructures, Inc. News Release Page 2
November 1, 2004
Edward J. Fred, CPI's CEO & President, stated, "Although third quarter revenue
was only slightly higher than last year, operating income 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 and ask for the CPI Aerostructures call. The
conference call will be broadcast live over the Internet at www.cpiaero.com. To
access the call, click on the "Investor Relations" section, then click on
"Events". Please go to the website 15 minutes prior to the call to download 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 GALAXY CARGO JET, THE T-38 TALON JET TRAINER AND
THE E-3 SENTRY AWACS 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. News Release Page 3
November 1, 2004
CPI AEROSTRUCTURES, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 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 --- 41,236 --- 461,235
operations
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,
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
CPI Aerostructures, Inc. News Release Page 4
November 1, 2004
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
CONTACT:
Vince Palazzolo Investor Relations Counsel
Chief Financial Officer The Equity Group Inc.
CPI Aerostructures, Inc. Linda Latman (212) 836-9609
(631) 586-5200 www.theequitygroup.com
www.cpiaero.com
