-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Du29vYWFdX3nRao0Mn/wHITtCCuJh/f/hncVulOgJw96TF8f1kvV0vkVU4XYyG1H eeVpiFlxcWx025Vf3BZX0g== 0000950116-96-000748.txt : 19960807 0000950116-96-000748.hdr.sgml : 19960807 ACCESSION NUMBER: 0000950116-96-000748 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960806 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CPI AEROSTRUCTURES INC CENTRAL INDEX KEY: 0000889348 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 112520310 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20524 FILM NUMBER: 96604540 BUSINESS ADDRESS: STREET 1: 200A EXECUTIVE DR CITY: EDGEWOOD STATE: NY ZIP: 11717 BUSINESS PHONE: 5165865200 10QSB/A 1 FORM 10-QSB/A ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A AMENDMENT NO. 1 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period Commission File Number 1-11398 ended June 30, 1996 CPI AEROSTRUCTURES, INC. (Exact Name of Small Business Issuer as Specified in its Character) New York 11-2520310 - --------------------------------- ------------------------------------ (State or Other Jurisdiction (IRS Employer Identification Number) of Incorporation or Organization) 200A EXECUTIVE DRIVE, EDGEWOOD, NY 11717 (Address of Principal Executive Offices) Telephone number (516) 586-5200 (Issuer's Telephone Number Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No ____ The number of shares of common stock, par value $.001 per share, outstanding was 5,778,304 as of June 30, 1996. =============================================================================== CPI AEROSTRUCTURES, INC. INDEX ============================================================================ Part I. Financial Information: Item 1 - Financial Statements: Balance Sheets as of June 30, 1996 (Unaudited) and 3 December 31, 1995 Statements of Income for the Three and Six Months ended June 30, 1996 (Unaudited) and 1995 (Unaudited) 4 Statements of Cash Flows for the Six Months ended June 30, 1996 (Unaudited) and 1995 (Unaudited) 5 Notes to Financial Statements (Unaudited) 6-7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 Part II. Other Item 6 - Exhibits and Reports on Form 8-K 10 Signatures 11 2
CPI AEROSTRUCTURES, INC. BALANCE SHEETS ====================================================================================================================== June 30, December 31, 1996 1995 (Unaudited) - ---------------------------------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $ 327,703 $ 998,517 Accounts receivable 1,755,407 1,565,048 Costs and estimated earnings in excess of billings on uncompleted 10,241,190 9,677,390 contracts (Note 2) Other current assets 331,445 329,199 - ---------------------------------------------------------------------------------------------------------------------- Total current assets 12,655,745 12,570,154 Property, Plant and Equipment, net 196,155 196,384 Deferred Income Taxes 113,000 113,000 Other Assets 29,226 75,519 - ---------------------------------------------------------------------------------------------------------------------- Total Assets $12,994,126 $12,955,057 ====================================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 1,497,310 $ 1,160,285 Accrued expenses 291,327 260,288 Current portion of long-term debt 16,135 630,525 Deferred income taxes 445,000 445,000 - ---------------------------------------------------------------------------------------------------------------------- Total current liabilities 2,249,772 2,496,098 Long-term Debt - 1,730,229 - ---------------------------------------------------------------------------------------------------------------------- Total liabilities 2,249,772 4,226,327 - ---------------------------------------------------------------------------------------------------------------------- Commitments Shareholders' Equity Common stock - $.001 par value; authorized 10,000,000 shares, 5,778,304 and 3,728,304 issued and outstanding, respectively 5,778 3,728 Additional paid-in capital 9,123,691 7,436,079 Retained earnings 1,614,885 1,288,923 - ---------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 10,744,354 8,728,730 - ---------------------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $12,994,126 $12,955,057 ======================================================================================================================
See Notes to Financial Statements 3
CPI AEROSTRUCTURES, INC. STATEMENTS OF INCOME ====================================================================================================================== For the Three Months ended June 30, For the Six Months Ended June 30, 1996 1995 1996 1995 (Unaudited) (Unaudited) - ---------------------------------------------------------------------------------------------------------------------- Revenue $1,635,874 $1,078,994 $3,186,493 $2,362,031 Cost of sales 1,049,033 584,211 2,022,182 1,303,988 - ---------------------------------------------------------------------------------------------------------------------- Gross profit 586,841 494,783 1,164,311 1,058,043 Selling, general and administrative 333,121 281,134 667,496 609,605 expenses - ---------------------------------------------------------------------------------------------------------------------- Income from operations 253,720 213,649 496,815 448,438 - ---------------------------------------------------------------------------------------------------------------------- Other (income) expense: Interest income (4,631) 14,628 (34,652) (12,645) Interest expense 51,872 106,070 109,451 214,997 - ---------------------------------------------------------------------------------------------------------------------- Total other expenses, net 47,241 120,698 74,799 202,352 - ---------------------------------------------------------------------------------------------------------------------- Income before provision for income taxes and extraordinary item 206,479 92,951 422,016 246,086 Provision for income taxes 72,000 40,000 147,000 105,000 Income before extraordinary item $ 134,479 $ 52,951 $ 275,016 $ 141,086 Extraordinary item - gain on early extinguishment of debt, net of provision - - for income taxes of $28,000 50,947 50,947 - ---------------------------------------------------------------------------------------------------------------------- Net Income $ 185,426 $ 52,951 $ 325,963 $ 141,086 ====================================================================================================================== Earnings per shares (Note 3): Income before extra ordinary item $ .03 $ .02 $ .07 $ .04 Extraordinary item $ .01 $ - $ .01 $ - - ---------------------------------------------------------------------------------------------------------------------- Net earnings $ .04 $ .02 $ .08 $ .04 ====================================================================================================================== Weighted average shares and common share equivalents outstanding 4,396,323 3,728,304 4,262,336 3,720,377 ======================================================================================================================
See Notes to Financial Statements 4
CPI AEROSTRUCTURES, INC. STATEMENTS OF CASH FLOWS ====================================================================================================================== For the Six Months Ended June 30, 1996 1995 (Unaudited) - ---------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 325,963 $ 141,086 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 39,867 62,168 Extraordinary item (50,947) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (190,359) 954,541 (Increase) decrease in prepaid expenses and other current assets (2,246) 51,904 Increase in costs and estimated earnings in excess of billings on uncompleted contracts (563,800) (1,031,482) (Increase) decrease in other assets 25,239 (37,330) Increase in accounts payable 337,025 17,426 Increase (decrease) in accrued expenses 3,039 (148,001) Increase in income taxes payable - 105,000 - ---------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) operating activities (76,219) 115,312 - ---------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchase of property and equipment (39,638) - - ---------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (39,638) - - ---------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Long-term debt and officer note payments (2,244,619) (397,459) Proceeds from exercise of stock options/warrants/private placement 1,689,662 145,174 - ---------------------------------------------------------------------------------------------------------------------- Net cash used in financing activities (554,957) (252,285) - ---------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash (670,814) 136,973 Cash at beginning of year 998,517 1,796,095 ====================================================================================================================== Cash at end of period $ 327,703 $ 1,659,112 ====================================================================================================================== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 131,937 $ 259,321 ====================================================================================================================== Income taxes $ 10,300 $ 32,926 ======================================================================================================================
See Notes to Financial Statements 5 CPI AEROSTRUCTURES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ 1. INTERIM The financial statements as of June 30, 1996 and for the six FINANCIAL and three months ended June 30, 1996 and 1995 are unaudited. STATEMENTS In the opinion of the management of the Company, these financial statements reflect all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position of the Company and the results of operations for such interim periods are not necessarily indicative of the results to be obtained for a full year. 2. COSTS AND Costs and estimated earnings in excess of billings on ESTIMATED uncompleted contracts consist of: EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS:
June 30, 1996 ---------------------------------------------------------------------------------------- U.S. Government Commercial Total ---------------------------------------------------------------------------------------- Costs incurred on uncompleted contracts $667,157 $21,194,299 $21,861,456 Estimated earnings 239,528 11,747,120 11,986,648 ---------------------------------------------------------------------------------------- 906,685 32,941,419 33,848,104 Less billings to date 552,273 23,054,641 23,606,914 ======================================================================================== Costs and estimated earnings in excess of billings on uncompleted contracts $354,412 $9,886,778 $10,241,190 ======================================================================================== December 31, 1995 ---------------------------------------------------------------------------------------- U.S. Government Commercial Total ---------------------------------------------------------------------------------------- Costs incurred on uncompleted contracts $631,426 $19,738,969 $20,370,395 Estimated earnings 201,250 10,777,343 10,978,593 ---------------------------------------------------------------------------------------- 832,676 30,516,312 31,348,988 Less billings to date 716,030 20,955,568 21,671,598 ======================================================================================== Costs and estimated earnings in excess of billings on uncompleted contracts $116,646 $9,560,744 $9,677,390 ========================================================================================
6 CPI AEROSTRUCTURES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ 3. EARNINGS PER The earnings per share calculations are computed by dividing COMMON SHARE: net income, increased by proforma reductions in interest expense (net of tax) resulting from the assumed exercise of stock options and warrants and the resulting assumed reduction of outstanding indebtedness, by the weighted average number of common and common equivalent shares outstanding. 7 CPI AEROSTRUCTURES, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations =============================================================================== Material Changes in Results of Operations The Company's revenues for the three months ended June 30, 1996 were $1,635,874 compared to $1,078,994 for the same period last year, representing an increase of $556,880, or 52%. Revenues for the six month period ended June 30, 1996 were $3,186,493 compared to $2,362,031 for the same period last year, representing an increase of $824,462 or 35%. This increase is due in part to an accelerated delivery schedule of Apron assemblies which the Company builds for Rohr Industries, for use on the MD-90 aircraft. Additionally, revenue from the Company's new military contracts, which it was awarded in late 1995 has begun, as the Company commenced deliveries of spare parts for the C-5 aircraft during the six months ended June 30, 1996. It is anticipated that because of these new contracts, and specifically the increased magnitude of the C-5 contract, the Company's revenues should remain at a higher level than 1995. Commercial aircraft programs represented 76% of total revenues for the six months ended June 30, 1996 compared to 96% for the same period in 1995. The above statements discussed in this Report include forward looking statements that involve risks and uncertainties, including the timely delivery and acceptance of the Company's products and the other risks detailed from time to time in the Company's SEC reports. Gross profit increased by $92,058, or 19%, from the three months ended June 30, 1996 to the three months ended June 30, 1995. Gross profit for the six month period ended June 30, 1996 was $1,164,311 compared to $1,058,043 for the same period last year, representing an increase of $106,268 or 10%. Gross profit as a percentage of revenues for the six months ended June 30, 1996 was 37% compared to 45% for the same period last year. Selling, general, and administrative expenses increased by $51,987 or 18%, from the three months ended June 30, 1995 to the three months ended June 30, 1996. Selling, general and administrative expenses for the six months ended June 30, 1996 were $667,496 compared to $609,605 for the comparable period last year, representing an increase of $57,891 or 9%. Interest expense decreased by $105,546, or 49%, for the six months ended June 30, 1996, primarily attributable to a reduction in debt to Chrysler Capital Corporation, ("Chrysler") and the extinguishment of the Company's debt to Chase Manhattan for the mortgage on its building, which was sold in December, 1995. The resulting net income for the three months ended June 30, 1996, was $185,426 versus $52,951 for the same period last year. Net income for the six months ended June 30, 1996 was $325,963 compared to $141,086 for the same period last year, representing an increase of $184,877 or 131%. Earnings per share were $.08 for the six months ended June 30, 1996, based upon the weighted average common shares outstanding of 4,262,336 as compared to earnings per share of $.04 for the six months ended June 30, 1995 based upon the weighted average common shares outstanding of 3,720,377. Material Changes in Financial Condition At June 30, 1996 and December 31, 1995, the Company had working capital of $10,405,973 and $10,074,056, respectively, an increase of $331,917. This is primarily attributable to the retirement of the Company's debt to Chrysler. On June 19, 1996, the Company completed a $2,050,000 Equity Private Placement. The net proceeds of the offering, along with working capital, were used to eliminate the Company's debt to Chrysler. 8 CPI AEROSTRUCTURES, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations =============================================================================== The Company has financed its working capital requirements during the past three years through borrowings primarily from Chrysler, the Company's initial public offering and subsequent warrant exercise, and operating cash flow. Historically, a large portion of the Company's cash has been used for costs and estimated earnings in excess of billings. Costs and estimated earnings in excess of billings includes the aggregate of costs and related profit which has been incurred and earned in performance of work for which the Company has firm contracts, but has not yet been billed to the customer. Costs and estimated earnings are recoverable upon shipment of products, presentation of billings in accordance with contract terms or completion of a contract. Net cash used in operating activities for the six months ended June 30, 1996 was $76,319. This decrease in cash was primarily the result of net income of $325,963 and an increase in accounts payable of $337,025 and an increase in accrued expenses of $3,039 offset by an increase in costs and estimated earnings in excess of billings of $563,800 and an increase in accounts receivable of $190,359. The Company's continued requirement to incur significant costs in connection with commercial contracts in advance of receipt of associated cash has caused the increase in costs and estimated earnings in excess of billings on uncompleted contracts. 9 CPI AEROSTRUCTURES, INC. =============================================================================== ITEM 6. Exhibits and Reports on Form 8-K a) No Exhibits b) A report on Form 8-K was filed with the Securities and Exchange Commission regarding the Company's June 19, 1996 private placement (the "Private Placement") under Regulation D promulgated under the Securities Act of 1933, as amended, of 82 Units (the "Units"), each Unit consisting of 25,000 shares (the "Shares") of common stock, $.001 par value per share (the "Common Stock") of the Company and 5-year Common Stock Purchase Warrants (the "Warrants") to purchase 12,500 shares of Common Stock at $2.00 per share, for a total purchase price of $2,050,000 ($25,000 per Unit), through Barber & Bronson Incorporated, as placement agent (the "Placement Agent"). The net proceeds of the Private Placement, along with working capital, were used to repay all of the Company's indebtedness to Chrysler Capital Corporation. The purchasers were granted certain demand and piggyback registration rights with respect to the shares included in the Units and underlying the Warrants. The Company paid the Placement Agent a selling commission of 10% of the gross proceeds of the Private Placement and a non-accountable expense allowance in an amount equal to 3% of the gross proceeds of the Private Placement. The Company also sold to the Placement Agent, for nominal consideration, five-year warrants (the "Placement Agent Warrants") to purchase 8.2 additional Units at a purchase price of $25,000 per Unit. The Company previously retained the Placement Agent, pursuant to a financial consulting agreement (the "Consulting Agreement"), to provide financial consulting services for a period of 24 months commencing on April 3, 1996, for an aggregate of $72,000 payable at the rate of $3,000 per month. The Placement Agent received five-year warrants to purchase 300,000 shares of Common Stock at an exercise price of $1.00 per share (the "Consulting Warrants"). The Placement Agent has been granted certain demand and piggy back registration rights with respect to the shares of Common Stock underlying the Placement Agent Warrants and the Consulting Warrants. Furthermore, the Consulting Agreement provides for finder's fee arrangements and a three-year right of first refusal for the Placement Agent to serve as the underwriter or placement agent for any future public or private offering effected by the Company. Pursuant to the anti-dilution provisions of the warrants ("Underwriter's Warrants") issued to Whale Securities Co., L.P. ("Whale"), the underwriter of the Company's initial public offering, the number of shares issuable to Whale and its assignees upon issuance of the Underwriter's Warrants was increased from 200,000 to 1,132,076 following various stock issuances by the Company, including but not limited to, the Private Placement. 10 CPI AEROSTRUCTURES, INC. =============================================================================== SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CPI AEROSTRUCTURES, INC. Dated: July 25, 1996 By: /S/ Arthur August ------------------------- Arthur August President (Principal Executive Officer) Dated: July 25, 1996 By: /S/ Theodore J. Martines ------------------------- Theodore J. Martines Executive Vice President (Principal Financial Officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000889348 CPI AEROSTRUCTURES, INC. 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 327,703 0 1,755,407 0 10,241,190 331,445 515,866 319,711 12,944,126 2,249,772 0 0 0 5,778 10,738,576 12,944,126 3,186,493 3,186,493 2,022,182 2,022,182 667,496 0 109,451 422,016 147,000 275,016 0 50,947 0 325,963 .08 .08
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