FARNBOROUGH, United Kingdom - CPI Aerostructures (NYSE:CVU), Inc. (NYSE American: CVU), a U.S. manufacturer of structural assemblies for aircraft, announced a Long Term Agreement (LTA) with MST Manufacturing for component supply to support its aerostructures production. The deal, finalized during the international air show in Farnborough, will extend through the end of 2027.
Dorith Hakim, president and CEO of CPI Aero, expressed confidence in the strengthened relationship with MST, which has been a critical supplier for the company. Kenneth Statton, CEO & founder of MST, reciprocated the sentiment, highlighting the successful partnership and future prospects.
CPI Aero operates as a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor within the global aerostructure supply chain and serves as a prime contractor to the U.S. Department of Defense, primarily the Air Force. The company's services encompass engineering, program management, supply chain management, and MRO services.
MST Manufacturing, situated in Claremore, Oklahoma, is known for its complex CNC machining and fabrication capabilities. With over 65,000 square feet of manufacturing space and a robust team, MST holds AS9100, ISO9001, and ITAR certifications. Their extensive range of services includes 5-axis milling, multi-axis turning, and complex sheet metal forming.
The press release also contains forward-looking statements regarding CPI Aero's plans and expectations. These statements are not guarantees of future performance and are subject to risks and uncertainties.
The company cautions against undue reliance on these forward-looking statements, which are based on current beliefs and assumptions and are qualified by important factors that could cause actual results to differ materially.
This announcement is based on a press release statement from CPI Aerostructures, Inc. Investors are advised that the company does not undertake to update any forward-looking statements in the future. CPI Aerostructures is a registered trademark of CPI Aerostructures, Inc. For more information, the company can be followed on Twitter @CPIAERO.
In other recent news, CPI Aerostructures has seen several significant developments. The company reported a change in its executive compensation, increasing CEO Dorith Hakim's annual base salary by 4.8% to $385,000, a decision made by the Compensation and Human Resources Committee.
Moreover, CPI Aerostructures has appointed Marcum LLP as its new independent accounting firm, replacing RSM US LLP. The transition occurred without disagreements over accounting principles or financial statement disclosure, though the company did report "reportable events" related to internal control matters.
Shareholders of CPI Aerostructures recently approved executive compensation and elected Pamela Levesque and Richard C. Rosenjack, Jr. as Class II directors. They also decided on an advisory basis that future votes on executive compensation should occur annually. These decisions reflect the shareholders' support for the current board's leadership and compensation policies.
On the business front, CPI Aerostructures secured a follow-on order worth approximately $1.3 million for welded structural assemblies from a U.S. military helicopter customer. This order reinforces the company's ongoing relationship with the U.S. Defense and Allied Forces and is expected to be fulfilled by mid-2025. These recent developments provide insight into the company's executive compensation practices, auditing changes, and business engagements.
InvestingPro Insights
As CPI Aerostructures, Inc. (NYSE American: CVU) secures a new Long Term Agreement with MST Manufacturing, it's an opportune moment to delve into the company's current financial health and market performance. According to InvestingPro data, CPI Aerostructures boasts a lean market capitalization of $30.21 million USD, reflecting its niche position in the aerostructures sector.
A standout feature for CPI Aero is its low earnings multiple, with an adjusted P/E ratio of 1.86 as of the last twelve months leading up to Q1 2024. This metric suggests that the company's shares are trading at a lower price relative to its earnings, which could be an indicator of a potential undervaluation. Investors often look for such opportunities, where a company's market price may not fully reflect its earnings capacity.
In terms of profitability, CPI Aero has been in the green over the past twelve months, a reassuring sign for stakeholders amidst the competitive and capital-intensive aerospace industry. The company's ability to maintain profitability is crucial as it navigates the complexities of long-term supply agreements and defense contracts.
An InvestingPro Tip worth noting is the company's high shareholder yield, a metric that combines dividend payouts and share repurchases to assess the total returns being distributed to shareholders. While CPI Aero does not pay a dividend, the high shareholder yield indicates that the company is effectively returning value through other means, such as share buybacks or debt reduction.
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