Revenue Performance - Total revenue for the three months ended September 30, 2024, was $19,419,879, a decrease of 4.8% from $20,399,369 in the same period of 2023[7] - Revenue for the three months ended September 30, 2024, was $19,419,879, a decrease of 4.8% compared to $20,399,369 for the same period in 2023[17] - Revenue recognized using the over time revenue recognition model for the nine months ended September 30, 2024, was $58,558,552, down from $59,353,845 in 2023, reflecting a decline of 1.3%[18] - Total revenue for the nine months ended September 30, 2024 was $59,311,356, down 5.8% from $62,963,592 in the same period last year, driven by decreases in Sikorsky and Lockheed Martin programs[72] Profitability - Gross profit for the three months ended September 30, 2024, increased to $4,219,669, up 13.8% from $3,706,090 in the prior year[7] - The company reported a gross profit margin of 21.7% for the three months ended September 30, 2024, compared to 18.2% in the same period of 2023[7] - Net income for the three months ended September 30, 2024, was $749,677, compared to $301,364 for the same period in 2023, representing a significant increase of 148.5%[7] - Net income for the nine months ended September 30, 2024, was $2,327,861, a decrease of $113,884 or 4.7% compared to the same period in 2023[101] Expenses - Selling, general and administrative expenses increased to $2,742,036 for the three months ended September 30, 2024, compared to $2,535,065 in the prior year[7] - Stock-based compensation expenses of $529,771 for the three months ended September 30, 2024, down from $659,855 in the same period of 2023, representing a decrease of approximately 19.7%[9] - Interest expense for Q3 2024 decreased to $573,366, down $90,491 or 13.6% from Q3 2023 due to lower interest rates and reduced outstanding debt[91] Assets and Liabilities - Total current assets decreased to $43,372,955 as of September 30, 2024, down from $46,913,731 at December 31, 2023[6] - The company’s total assets decreased to $68,887,763 as of September 30, 2024, from $74,360,132 at December 31, 2023[6] - Total liabilities decreased to $43,948,403 as of September 30, 2024, down from $52,278,404 at December 31, 2023[6] - The company’s accumulated deficit improved to $(49,475,861) as of September 30, 2024, compared to $(51,803,722) at December 31, 2023[6] Cash Flow - Cash flows from operating activities resulted in a net cash used of $837,077 for the three months ended September 30, 2024, contrasting with a net cash provided of $840,128 in the same period of 2023[9] - The balance of cash at the end of the period was $1,708,987, down from $2,609,693 at the end of September 30, 2023, reflecting a decrease of approximately 34.5%[9] - Cash decreased to $1,708,987 as of September 30, 2024, down $3,385,807 or 66.5% from December 31, 2023[108] Shareholder Equity - As of September 30, 2024, the total shareholders' equity increased to $24,939,360, up from $22,531,489 at March 31, 2024, reflecting a growth of approximately 10.7%[8] - The total common stock shares increased to 12,933,408 as of September 30, 2024, from 12,784,768 at March 31, 2024, marking an increase of approximately 1.2%[8] Taxation - The effective income tax rate for the nine months ended September 30, 2024 was 18.7%, compared to 17.1% for the same period in 2023[56] - Provision for income taxes for Q3 2024 was $154,590, a decrease of $51,214 or 24.9% compared to Q3 2023[94] - The effective income tax rate for Q3 2024 was 17.1%, lower than the statutory rate of 21% due to estimated R&D credits and other factors[95] Operational Insights - Total backlog as of September 30, 2024 was $506,021,000, with funded backlog at $91,502,000 and unfunded backlog at $414,519,000[66] - Approximately 96% of the total backlog at September 30, 2024 was attributable to government and military contracts[66] - Revenue from military subcontracts increased by 10.5% to $16,986,106 in Q3 2024 compared to $15,375,337 in Q3 2023, mainly due to Raytheon NGJ – Mid Band Pods[73] - Revenue from government military contracts decreased by 57.6% to $1,673,483 in Q3 2024, primarily due to delays in the USAF T-38 program[75] Compliance and Control - A material weakness was identified in internal control over financial reporting related to income tax accounting as of December 31, 2023[121] - The company plans to implement new controls to remediate the identified material weakness during 2024[122] - The company replaced its outside tax accounting firm and retained a new firm to prepare and review income tax accounting and disclosures for the quarter ended September 30, 2024[123] - Tax accounting has been updated as a high-risk area in the company's financial risk assessment[124]
CPI Aero(CVU) - 2024 Q3 - Quarterly Report