CPI Aerostructures Reports 19.3% Revenue Decline and Net Loss in Q1 2025

CPI Aerostructures, Inc. reported a significant decline in financial performance for the first quarter of 2025, with total revenue of $15.4 million, down 19.3% from $19.1 million in the same period last year. The decrease was primarily attributed to unfavorable adjustments related to the A-10 Main Landing Gear Pods program, which faced increased labor and material costs. The company's gross profit also fell sharply to $1.6 million, representing a gross margin of 10.7%, compared to $3.6 million and a margin of 18.6% in the prior year. This resulted in a net loss of $1.3 million, or $(0.10) per share, contrasting with a net income of $168,238, or $0.01 per share, in the first quarter of 2024.

In terms of operational metrics, CPI Aerostructures experienced a decrease in its backlog, which totaled $515.9 million as of March 31, 2025, compared to $510.3 million at the end of 2024. The funded backlog decreased to $82.2 million from $85.0 million, while the unfunded backlog increased to $433.8 million from $425.2 million. The company’s customer base remains concentrated, with its four largest customers accounting for 83% of revenue during the quarter, compared to 69% in the previous year.

CPI Aerostructures has made strategic adjustments to its financial structure, including a waiver obtained from lenders on May 14, 2025, regarding noncompliance with certain financial covenants as of March 31, 2025. This waiver allows the company to avoid default under its credit agreement, which has been amended to extend the maturity date of its revolving line of credit to August 31, 2026. The company reported a working capital of $14.9 million, down from $17.1 million at the end of 2024, primarily due to a significant decrease in cash reserves.

The company’s operational challenges are reflected in its cash flow, which saw a decrease of 65.9% to $1.9 million as of March 31, 2025, compared to $5.5 million at the end of the previous year. This decline was driven by cash used in operating activities and debt repayments. CPI Aerostructures continues to monitor its financial performance closely and is exploring options to improve cash flow, including better payment terms with customers and potential additional funding sources.

Looking ahead, CPI Aerostructures anticipates ongoing challenges due to inflationary pressures and supply chain uncertainties, which could impact profitability. The company remains focused on its core operations in the aerospace sector, particularly in government and military contracts, which constitute a significant portion of its backlog. Management is committed to addressing the operational issues that have affected financial performance and is optimistic about future contract opportunities as it navigates the current economic landscape.