Exhibit 99.1
CPI AEROSTRUCTURES, INC.
200A Executive Drive o Edgewood, New York 11717
(631) 586-5200 o FAX (631) 586-5814
FOR IMMEDIATE RELEASE
CPI AEROSTRUCTURES ANNOUNCES RECORD FOURTH QUARTER AND
YEAR-END RESULTS
Edgewood, NY - March 31, 2003 -- CPI Aerostructures, Inc. ("CPI") (AMEX: CVU)
today announced record results from continuing operations for the fourth quarter
and year-ended December 31, 2002.
Fourth Quarter 2002 versus 2001
o Revenue rose 36.8% to $6,010,509 from $4,392,069;
o Gross margin was 37.6% versus 10.3%;
o Income from operations rose to $1,371,505 from $118,984;
o Pre-tax income was $1,245,732 compared to $97,467;
o Net income, which included an $800,000 NOL tax benefit, was $1,650,732 or
$.50 per diluted share compared to a net loss of $11,467,068, which
included a loss of $11,564,535 from the discontinued Kolar segment.
Effective December 31, 2001, the Company's former machining business, Kolar, was
closed and its results of the operations have been classified as discontinued.
Revenue for 2001 has been restated to reflect the discontinued operations of
Kolar.
2002 Financial Highlights
For 2002, CPI Aerostructures achieved revenue of $23,999,257, resulting in
income from operations of $5,009,720. Compared to 2001, this represents a 36.8%
increase in revenue and a 93.5% increase in income from operations. Income
before taxes in 2002 was $4,568,624 while net income was $4,444,624 or $1.40 per
diluted share. The negligible 2002 tax rate reflects the utilization of
$1,600,000 of net operating loss carryforwards. In 2001, the Kolar discontinued
business produced over $14 million of losses (both operations and the disposal
of assets), which more than offset $2,589,342 or $.92 per basic share in income
from continuing operations. Thus for 2001, there was a net loss of $11,638,119
or $4.39 per basic share.
Edward J. Fred, CPI's CEO & President stated, "At the core of our financial
story for 2002 is substantial growth in revenue, operating income, operating
margins and contract awards. CPI's contract awards were $24.5 million, up 28%
compared to 2001, for our sixth consecutive year of double-digit growth. Thanks
to our technical know-how, quality and on-time delivery, our bid-to-win ratio
was about 11% in 2002, which we believe could improve again this year. As of
this date, our new contract awards of $11.1 million are running 44% ahead of
this time last year.
(more)
CPI Aerostructures, Inc. News Release Page 2
March 31, 2003
Mr. Fred continued, "We have every confidence in our ability to meet our current
guidance of a minimum of $30 million in revenue. While we have an NOL of
approximately $12.9 million and $10.4 million available for federal and state
income tax purposes, respectively, if CPI were fully-taxed, we would expect to
report net income from operations of approximately $3.95 million for 2003, or a
43.4% improvement over the 2002 equivalent of $2.75 million. Our bottom line
should be further buoyed to about $9.4 million, as a result of the tax benefits
of our NOL, anticipated gains on the sale of Kolar buildings, and the gain on
the early extinguishment of debt."
He continued, "The successful completion of our 2.3 million share public
offering last month yielded $7,764,000 in net proceeds. This allowed us to repay
substantially all of our debt, save over $500,000 in interest per annum and
provided us with an extra $2,700,000 of working capital. On a pro forma adjusted
basis, our shareholders' equity at December 31, 2002 was $12.8 million. Our
strong balance sheet gives us one more competitive edge as we bid for larger
contracts. The public offering also significantly increased the number of our
outstanding shares, public float and market cap, which we believe benefits all
investors as we deliver on our 2003 guidance and set higher goals for 2004."
CONFERENCE CALL
CPI's President & CEO Edward J. Fred will host a conference call today, March
31st at 11 am ET 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 (973) 582-2866. Please
call in 10 minutes before the scheduled time and ask for the CPI Aerostructures
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 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 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, 2001, and CPI's Form
10-QSB for the quarters ended March 31, 2002, June 30, 2002, and September 30,
2002.
Contact:
Edward J. Fred Investor Relations Counsel
President & CEO The Equity Group Inc.
CPI Aerostructures, Inc. Linda Latman (212) 836-9609
(631) 586-5200 www.theequitygroup.com
www.cpiaero.com
(See Accompanying Tables)
CPI Aerostructures, Inc. News Release Page 3
March 31, 2003
CPI AEROSTRUCTURES, INC.
CONDENSED STATEMENTS OF INCOME
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
---- ---- ---- ----
Revenue $ 6,010,509 $ 4,392,069 $23,999,257 $15,024,027
Income from continuing operations before
income taxes 1,245,732 97,467 4,568,624 2,431,897
Provision (benefit) for income taxes (405,000) -0- 124,000 -0-
Income before discontinued segment 1,650,732 97,467 4,444,624 2,431,897
Income (loss) from operations of
discontinued segment -0- (1,141,719) -0- (3,647,200)
Loss on disposal of assets -
discontinued segment -0- (10,422,816) -0- (10,422,816)
Net income (loss) $ 1,650,732 $ (11,467,068) $ 4,444,624 $(11,638,119)
Basic earnings (loss) per common share:
From continuing operations $ 0.60 $ 0.04 $ 1.63 $ 0.92
From operations of discontinued segment -0- (0.43) -0- (1.37)
From disposal of assets of discontinued segment -0- (3.94) -0- (3.94)
Earnings (loss) per common share - basic $ 0.60 $ (4.31) $ 1.63 $ (4.39)
Diluted net income per common share:
From continuing operations $ 0.50 $ -- $ 1.40 $ --
From discontinued segment -0- -- -0- --
Earnings per common share - diluted $ 0.50 $ -- $ 1.40 $ --
Shares used in computing earnings per common share:
Basic 2,773,277 2,657,046 2,721,522 2,653,538
Diluted 3,304,185 -- 3,184,536 --
* Effective December 31, 2001, the Company's former machining business, Kolar
was closed and its results of the operations have been classified as
discontinued. Revenue for 2001 has been restated to reflect the
discontinued operations of Kolar.
* In 2001, diluted earnings per share are not presented as the result is
antidilutive.
CPI Aerostructures, Inc. News Release Page 4
March 31, 2003
Actual Pro Forma Actual
Balance Sheet Highlights 12/31/02 12/31/02 12/31/01
Cash $ 91,537 $ 2,722,931 $ 180,578
Total current assets 15,202,592 17,533,310 13,377,211
Total assets 15,604,746 17,955,464 13,830,697
Total current liabilities 13,227,018 5,112,412 16,184,868
Working capital (deficit) 1,975,574 12,802,860 (2,807,657)
Short-term debt 8,024,160 108,554 9,607,284
Long-term debt 40,192 40,192 - 0 -
Shareholders' equity
deficiency) 2,337,536 12,802,860 (2,354,171)
Total Liabilities
and Shareholders' Equity 15,604,746 17,955,464 13,830,697
The pro forma consolidated balance sheet has been derived from the consolidated
balance sheet of the Company at December 31, 2002 and adjusts for capital
infusion and repayment of indebtedness resulting from the February 2003 equity
offering of 2.3 million common shares as if such transactions had occurred at
December 31, 2002. The pro forma consolidated balance sheet is presented for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the transactions below
had been consummated at December 31, 2002.