CPI Aero(US:CVU)2025-11-14 02:31Revenue Performance - Revenue for the three months ended September 30, 2025, was $19,269,102, a decrease of 0.77% compared to $19,419,879 for the same period in 2024[8] - For the three months ended September 30, 2025, total revenue was $19,269,102, a decrease of 0.8% compared to $19,419,879 for the same period in 2024[20] - For the nine months ended September 30, 2025, total revenue was $49,848,818, down 15.9% from $59,311,356 in 2024[20] - For the nine months ended September 30, 2025, revenue was $49,848,818, down 16% from $59,311,356 in 2024[8] Profitability - Gross profit for the nine months ended September 30, 2025, was $6,619,171, down 48.6% from $12,888,842 in 2024[8] - Gross profit for the three months ended September 30, 2025, was $4,306,314, compared to $4,219,669 in 2024, reflecting a slight increase[8] - The net loss for the nine months ended September 30, 2025, was $(1,535,191), compared to a net income of $2,327,861 for the same period in 2024[10] - The Company’s income (loss) from operations for the three months ended September 30, 2025, was $1,754,959, compared to $1,477,633 in 2024[8] Cash Flow and Liquidity - Cash at the end of the period on September 30, 2025, was $546,591, a decrease from $1,708,987 at the end of September 30, 2024[10] - The company experienced a decrease in cash, with a net decrease of $4,944,372 for the nine months ended September 30, 2025, compared to a decrease of $3,385,807 in 2024[10] - Operating cash flow for the nine months ended September 30, 2025, was $(3,105,825), compared to $(837,077) for the same period in 2024[10] Shareholders' Equity - Total shareholders' equity as of September 30, 2025, was $24,989,069, compared to $24,939,360 as of September 30, 2024[9] - The balance of shareholders' equity as of September 30, 2025, was $24,989,069, a decrease from $25,933,242 at the beginning of the year[9] Stock-Based Compensation - Stock-based compensation expense for the nine months ended September 30, 2025, was $591,018, compared to $529,771 in 2024[10] - Stock-based compensation for the nine months ended September 30, 2025, was $591,018, an increase from $529,771 in the same period of 2024[10] - Stock-based compensation expense for the three months ended September 30, 2025, was $102,206, compared to $72,713 in the same period of 2024, reflecting an increase of approximately 40.4%[32] Debt and Credit Facilities - As of September 30, 2025, the Company had $15,890,000 outstanding under the Revolving Credit Loans, with a maturity date extended to November 30, 2026[52] - The Company was not in compliance with the Credit Agreement's financial covenants as of June 30, 2025, and obtained waivers from lenders[45] - The Company entered into a Sixteenth Amendment to its Credit Agreement on November 13, 2025, extending the maturity of the revolving credit facility to November 30, 2026[71] Customer Concentration - The Company’s four largest customers accounted for 37%, 19%, 13%, and 13% of revenue for the nine months ended September 30, 2025[54] - The Company’s three largest customers accounted for 46%, 13%, and 12% of revenue for the three months ended September 30, 2025[54] Taxation - The effective income tax rate for the nine months ended September 30, 2025, was 40.5%, primarily due to estimated R&D credits and state income taxes[61] - The Company recognized a provision for income tax of $(1,043,373) for the nine months ended September 30, 2025, compared to a provision of $535,634 in 2024[60] Contracts and Obligations - As of September 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was approximately $100.1 million[25] - Contract assets as of September 30, 2025, were $33,695,994, compared to $32,832,290 as of December 31, 2024[27] - Contract liabilities as of September 30, 2025, were $1,992,910, down from $2,430,663 as of December 31, 2024[27] Inventory and Accounts Receivable - Total inventory as of September 30, 2025, was $593,605, a decrease from $918,288 as of December 31, 2024, representing a decline of about 35.4%[28] - The company reported a decrease in accounts receivable by $(2,596,402) for the nine months ended September 30, 2025[10] - The company had an increase in accounts receivable of $2,596,402 for the nine months ended September 30, 2025[10] Economic and Regulatory Environment - Economic and trade sanctions, including tariffs, may adversely affect the cost of raw materials and profitability, despite a predominantly US-based supply chain[67] - The federal government shutdown on October 1, 2025, could impact the defense industry, including the Company, due to potential slowdowns in funding and delays in contract payments[68] - The Company received a Termination Notice from Boeing regarding the A-10 program, requiring the scrapping and return of materials by August 15, 2025[69] - An adjustment was recognized in the quarter ended June 30, 2025, to address risks associated with the Boeing A-10 program termination, with further evaluations ongoing[70] Lease Obligations - The Company’s operating lease expense for the nine months ended September 30, 2025, was $1,784,937, compared to $1,611,487 for the same period in 2024[57] - The total undiscounted operating lease payments as of September 30, 2025, amounted to $13,127,968, with a present value of $10,125,234[58] - The Company’s weighted average remaining lease term for its operating leases is 5.5 years, with a weighted average discount rate of 9.5% as of September 30, 2025[58]