CPI Aero Announces
$53.5 Million Multi-Year Contract for F-16 Wing Components From the Defense Logistics Agency
November 17, 2014
Edgewood, NY – CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced that it has received a U.S. Government prime contract from the Defense Logistics Agency (DLA) to provide structural wing components and logistical support for global F-16 aircraft maintenance, repair and overhaul (MRO) operations. DLA Aviation, Richmond, VA is the contracting activity. CPI Aero will support wing MRO efforts for both the U.S. fleet of more than 1,000 F-16 aircraft as well as the nearly 1,900 F-16s flown by air forces around the world. The term of the contract is for a period of 5 years, with a single option for an additional 3-year period. The Company estimates the value of the contract, including options, to be approximately $53.5 million.
Under this Firm Fixed Price, Indefinite Delivery Indefinite Quantity contract, CPI Aero will be the single supplier of 439 structural wing parts used to maintain, repair and overhaul the F-16 aircraft. This is an integrated support contract that includes parts acquisition, stocking, and order fulfillment, as well as technical data management, configuration control, supply chain management, forecasting and inventory management. CPI Aero will also provide engineering support services for obsolescence management and diminishing manufacturing source challenges.
CPI Aero will establish and manage an inventory distribution site within the F-16 Wing Shop at the Ogden Air Logistics Center in Ogden, UT where it will maintain stock and fulfill requirements for the MRO operations of the U.S. fleet of F-16s. CPI Aero will stock the inventory needed to support the world wide F-16 fleet requirements at its Edgewood, NY location. CPI Aero will subcontract Lockheed Martin, the Original Equipment Manufacturer (OEM) of the F-16 aircraft, for program technical support. This new contract is expected to improve parts availability, decrease wing repair leadtime, and increase F-16 mission readiness.
Douglas McCrosson, President and CEO of CPI Aero, stated, “This is the largest contract we have received from the U.S. Government in more than a decade and re-establishes CPI Aero as one of the nation’s leading small business prime contractors of military aircraft structure. With this award, we have gained a footprint on a new platform for us, the F-16, one of the world’s most popular military aircraft, with approximately 2,900 aircraft flying in the air forces of 28 nations.”
Mr. McCrosson continued, “We have strategically invested in developing world class, OEM/Tier 1 caliber engineering and global supply chain management capabilities to support our growing manufacturing and assembly operations. It is gratifying to know that this demonstrated ability raised CPI Aero above a very capable field of competitors. This new contract, along with our recently announced $86 million contract for E-2D wing panel kits, validates our strategy to pursue large scale integrated supply chain services programs that capitalize on our investments.”
About CPI Aero
CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance pod systems in both the commercial aerospace and national security markets. Within the global aerostructure supply chain, CPI Aero is either a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1 manufacturers. CPI also is a prime contractor to the U.S. Department of Defense, primarily the Air Force. In conjunction with its assembly operations, CPI Aero provides engineering, program management, supply chain management, and MRO services. Among the key national security programs that CPI Aero supplies are the E-2D Advanced Hawkeye surveillance aircraft, the UH-60 BLACK HAWK® helicopter, the MH-53/CH-53 variant helicopters, the F-16 fighter aircraft, the MH-60S mine countermeasure helicopter, the AH-1Z ZULU attack helicopter, the DB-110 reconnaissance pod and the ALMDS mine detecting pod. In the commercial aviation market CPI Aero manufactures products for the Gulfstream G650 ultra-large cabin business jet, the HondaJet advanced light jet, the Embraer Phenom 300 business jet, the new Cessna Citation X+, and the S-92® helicopter. CPI Aero is included in the Russell Microcap® Index.
The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI Aero’s SEC reports, including CPI Aero’s Form 10-K for the year ended December 31, 2013 and Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014.
CPI Aero® is a registered trademark of CPI Aerostructures, Inc.
Chief Financial Officer
Investor Relations Counsel:
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