CPI Aerostructures (CVU) Tops Q4 EPS by 8c, Revenues Beat

April 16, 2021 6:05 AM EDT

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CPI Aerostructures (NYSE: CVU) reported Q4 EPS of $0.11, $0.08 better than the analyst estimate of $0.03. Revenue for the quarter came in at $25.4 million versus the consensus estimate of $21.9 million.

Fourth Quarter 2020 vs. Fourth Quarter 2019

  • Revenue of $25.4 million compared to $22.7 million.
  • Gross profit of $4.6 million compared to $2.5 million.
  • Gross margin of 18.2% compared to 10.9%.
  • Net income of $1.3 million compared to net loss of $(1.4) million.
  • Earnings per diluted share of $0.11 compared to loss per diluted share of $(0.12).
  • Cash flow from operations of $1.7 million compared to $3.7 million.

“For the fourth quarter, we delivered on our expectation for a strong finish to the year, posting 11.9% higher revenue, a 730-basis point improvement in gross margin and a swing to bottom line profitability. Revenue growth was driven by continued effective execution of our funded military backlog. Revenue from military contracts increased by 13% while revenue from commercial aviation contracts was essentially flat from last year.

“For the year, our top line grew slightly from 2019 despite the extraordinary and unprecedented circumstances of 2020. We are especially pleased that our defense product revenue increased by more than 15%, or $10.5 million over last year. This progress, however, was masked by a $10.4 million decline in our commercial revenue due to the Covid-19 pandemic. Cash flow from operations in 2020 was $1.2 million less than in 2019; however, 2019 benefited from a more than $3 million tailwind caused by a customer overpayment that was fully repaid during 2020, creating a headwind to reported cash generation,” said Douglas McCrosson, president and CEO of CPI Aero.

“As previously reported, at the end of the fourth quarter we exited a very unprofitable program we had with a business jet customer. This program had been a drag on our margins and operating cash flow generation for the past two years. The exit of this program contributed to a decline in our total backlog at year-end; however, the more than $476 million that remains is high-quality and comprised almost entirely of multi-year contracts with our defense industry customers for products supporting programs aligned with national security spending priorities. More importantly, the total backlog is converting to funded orders and we saw our second year in a row with a book-to-bill ratio higher than 1.24, while our funded backlog increased by 15% this year,” added Mr. McCrosson.

“During the back half of 2020, the seeds of our defense-oriented business development strategy began to bear fruit as a number of newer defense programs ramped up, driving revenue growth from defense contracts and margin gains. With several of these programs moving into production in 2021, we expect to sustain momentum in the business. This momentum along with a funded backlog of $170 million boosts our confidence in our outlook for higher revenue, operating income and operating cash flow in 2021 compared to 2020,” concluded Mr. McCrosson.

For earnings history and earnings-related data on CPI Aerostructures (CVU) click here.

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