EXHIBIT 99.1
[CPI AERO LOGO]
FOR IMMEDIATE RELEASE
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CPI AEROSTRUCTURES ANNOUNCES FIRST QUARTER RESULTS
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EDGEWOOD, NY - MAY 11, 2005 -- CPI Aerostructures, Inc. ("CPI Aero") (AMEX: CVU)
today announced operating results for the first quarter ended March 31, 2005.
FIRST QUARTER 2005 VERSUS 2004:
o Revenue was $6.2 million for both periods;
o Gross margin was 29% compared to 31%, slightly below the Company's
gross margin target of 30%-32%;
o Income from operations was $936,606 compared to $1,088,018;
o Net income was $578,656 or $0.09 per diluted share, compared to
$651,812 or $0.11 per diluted share.
Edward J. Fred, CPI Aero's President & CEO stated, "As projected, our current
first quarter revenue approximated last year's revenue. The decrease in gross
margin percentage was due to extra costs that we had to incur to rework a first
article that was rejected by the government. This rejection was the result of
non-conforming component parts purchased from a vendor. We no longer do business
with this vendor and, therefore, we do not anticipate that this situation will
recur in future periods.
"Also, as has been the case for several quarters, the U.S. government continues
to award contracts at a slow pace. Through April 30, 2005, new contract awards
were $3.3 million, all from Defense Supply Center Richmond (DSCR), compared to
$11.6 million for the same four month period last year. However, as we had
previously announced, the 2005 release for T-38 inlets occurred in late 2004.
Removing the 2004 T-38 award and a $3.0 million subcontract award from a major
prime defense contractor, both of which were awarded in the first quarter of
2004, core business awards from the DSCR were $3.3 million in 2005 compared to
$2.9 million in 2004.
"Additionally, our balance sheet at March 31, 2005 remains strong with no
significant long-term debt and shareholders' equity of $26 million."
Mr. Fred added, "Our financial results for the first quarter of 2005 are
consistent with our expectations. In addition, the record number of bids
outstanding has further increased to in excess of $140 million and we continue
to make bids on contracts on a weekly basis."
Mr. Fred concluded, "Because of the overall slowdown in government orders and
the uncertainty of the timing related to the next C-5 TOP order, looking ahead,
we project that the first half of 2005 will be flat as compared to 2004, with
revenue in the range of $12-$13 million. We project that revenue for the second
half of the year will be in the range of $12-$17 million, giving us a full year
of revenue in the range of $25-$30 million, with net income in the range of
$2.4-$3.5 million. These projections assume no revenue from a 2005 C-5 TOP order
or from any of the major proposals that we will be submitting bids on over the
next few months. The receipt of any of these awards or a significant C-5 release
could yield much better results."
(more)
CPI Aero News Release Page 2
May 11, 2005
CONFERENCE CALL
CPI Aero's President and CEO, Edward Fred, and CFO, Vincent Palazzolo, will host
a conference call today, May 11, 2005 at 11:00 am EDT to discuss these results
as well as recent corporate developments. After opening remarks, there will be a
question and answer period. Interested parties may participate in the call by
dialing 706-679-3079. Please call in 10 minutes before the scheduled time and
ask for the CPI Aero call. The conference call will also be broadcast live over
the Internet. To listen to the live call, please go to www.cpiaero.com and click
on the "Investor Relations" section, then click on "Events". Please access the
website 15 minutes prior to the call to download and install any necessary audio
software. The conference call will be archived and can be accessed for
approximately 90 days.
Founded in 1980, CPI Aero 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 Aero provides
engineering, technical and program management services. Among the key programs
that CPI Aero supplies are the C-5A Galaxy cargo jet, the T-38 Talon jet
trainer, the A-10 Thunderbolt attack jet, the E-3 Sentry AWACS jet and the
MH-60S mine countermeasure helicopter.
The above statements include forward looking statements that involve risks and
uncertainties, which are described from time to time in CPI Aero's SEC reports,
including CPI Aero's Form 10-KSB for the year ended December 31, 2004.
CONTACT:
Vincent Palazzolo Investor Relations Counsel:
Chief Financial Officer The Equity Group Inc.
CPI Aero Robert Greenberg (212) 836-9611
(631) 586-5200 Linda Latman (212) 836-9609
www.cpiaero.com www.theequitygroup.com
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(See Accompanying Tables)
CPI Aero News Release Page 3
May 11, 2005
CPI AEROSTRUCTURES, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
2005 2004
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Revenue $6,245,102 $6,228,108
Income from operations 936,606 1,088,018
Other expense 3,950 1,206
Income before provision for income taxes 932,656 1,086,812
Provision for income taxes 354,000 435,000
Net income 578,656 651,812
Income per common share:
Basic $0.11 $0.12
Diluted $0.09 $0.11
Shares used in computing income per common share:
Basic 5,417,300 5,301,770
Diluted 6,167,995 5,800,120
CPI Aero News Release Page 4
May 11, 2005
Unaudited Audited
Balance Sheet Highlights 3/31/05 12/31/04
Cash $ 1,222,910 $ 1,756,350
Total current assets 29,421,906 29,609,862
Total Assets 30,669,919 30,759,124
Total current liabilities 4,532,245 5,213,460
Working capital 24,889,661 24,396,402
Current portion of long-term debt 83,370 83,144
Long-term debt, net of current portion 108,349 129,276
Total Shareholders' equity 26,029,325 25,416,388
Total Liabilities and Shareholders' Equity $ 30,669,919 $ 30,759,124
