What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-04-08 · 121 added, 106 removed, 476 unchanged (32% of the section changed)

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Our products are generally used by customers in the production

of fixed wing aircraft, helicopters, electronic warfare (“EW”) systems, intelligence, surveillance, and reconnaissance

(“ISR”) systems, missiles, and other sophisticated A&D products.

We are primarily a Tier 1 supplier to Original

Equipment Manufacturers (“OEMs”).

We are also a Tier 2 supplier to larger Tier 1 manufacturers and a prime contractor

to the United States (“U.S.”) Department of Defense (“DOD”), primarily the U.S.

and refurbishment of fixed wing aircraft, helicopters, electronic warfare (“EW”) systems, intelligence, surveillance,

and reconnaissance (“ISR”) systems, missiles, autonomous systems, and other sophisticated A&D products.

primarily a Tier 1 supplier to Original Equipment Manufacturers (“OEMs”).

We are also a Tier 2 supplier to larger

Tier 1 manufacturers and a prime contractor to the United States (“U.S.”) Department of Defense (“DOD”),

primarily the U.S.

Air Force (“USAF”).

Our products are used by OEMs within both commercial aerospace and national security markets.

In addition to our assembly operations,

we provide manufacturing engineering, program management, supply chain management, kitting, and maintenance repair and overhaul

(“MRO”) services.

Our products are used by OEMs within both commercial aerospace and national

security markets.

In addition to our assembly operations, we provide manufacturing engineering, program management, supply chain

management, kitting, and maintenance repair and overhaul (“MRO”) services.

Aero has over 45 years of experience as a contractor.

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The acquisition included Miller Stuart and Compac Development

Corp., two other business lines that added fabrication of electrical cables, harnesses and enclosures to the Company’s capabilities.

Corporation, two other business lines that added fabrication of electrical cables, harnesses and enclosures to the Company’s

capabilities.

CPI Aero continues to engage in traditional high quality structural assembly manufacturing while incorporating the latest in technology

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Fusion Welded Fluid Tanks and Resistance Welding (Spot and

Seam) of complex metallic assemblies

Cables, Harness, and Enclosures:

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Management Systems, Power Distribution Systems, Fully Integrated Electrical Control Systems,

and enclosures

and RF enclosures

Services and Capabilities

a build-to-print structural component manufacturer, CPI Aero’s engineering focus is on executing customer contracts through

a build-to-print structural assemblies manufacturer, CPI Aero’s engineering focus is on executing customer contracts through

product realization, and to support collaborative design development using design for manufacturing and assembly (“DFMA”),

geometric dimensioning & tolerancing (“GD&T”), and tooling concept support.

Although not vertically

integrated, CPI Aero has a deep well of experience on various types of detail part manufacturing that allows us to provide detailed

design for manufacturing input during the design refinement process.

CPI Aero has a deep well of experience

on various types of detail part manufacturing that allows us to provide detailed design for manufacturing input during the design

refinement process.

have significant experience working in a full model-based definition environment, both CATIA and NX, due to our long sustainment

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aerospace build-to-print opportunities - in both new production and MRO statements of work.

believe that there has been a shift in the market for more build-to-print contracts by OEMs versus the recent past trend of design

and build contracts.

believe that there has been a shift in the market for more build-to-print contracts by OEMs versus the past trend of design and

build contracts.

This trend fits in well with CPI Aero’s strengths.

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With respect to Aerostructures products, we often compete against much larger Tier 1 suppliers,

such as Triumph Group, Spirit Aerosystems, Kaman Aerospace, GKN Aerospace, Ducommun, and LMI Aerospace.

We believe that we can

compete effectively with these larger companies by delivering products with the same level of quality and performance at a better

value for our customer.

With respect to Aerosystems products, such as our portfolio of EW and ISR integrated pod structures, we

find more limited competition and are not aware of competition from any of the Aerostructures companies mentioned above.

cases, we typically compete with the internal manufacturing arm of our customers.

We believe our unique skills related to integrated

pod structures combined with a very efficient and generally much lower cost structure create a competitive advantage for bidding

on Aerosystems contracts.

such as Spirit Aerosystems, Kaman Aerospace, GKN Aerospace, Ducommun, and LMI Aerospace.

We believe that we can compete effectively

with these larger companies by delivering products with the same level of quality and performance at a better value for our customer.

With respect to Aerosystems products, such as our portfolio of EW and ISR integrated pod structures, we find more limited competition

and are not aware of competition from any of the Aerostructures companies mentioned above.

In these cases, we typically compete

with the internal manufacturing arm of our customers.

We believe our unique skills related to integrated pod structures combined

with a very efficient and generally lower cost structure create a competitive advantage for bidding on Aerosystems contracts.

certain unrestricted contracts for the U.S.

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have positioned our Company to take advantage of opportunities in the military aerospace market to a broad customer base, which

we believe will reduce the potential impact of industry consolidation.

Our success as a subcontractor to defense prime contractors

has provided us with opportunities to also act as a subcontractor to prime contractors in the production of commercial aircraft

structures, which we believe will also reduce our exposure to defense industry consolidation, government spending decisions, and

other defense industry risks.

we believe will reduce the potential impact of industry consolidation or potential defense budget reductions.

Our success as a

subcontractor to defense prime contractors has provided us with opportunities to also act as a subcontractor to prime contractors

in the production of commercial aircraft structures, which we believe will also reduce our exposure to defense industry consolidation,

government spending decisions, and other defense industry risks.

OEM customers in the defense sector include leading prime defense contractors such as:

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to Sikorsky, a Lockheed Martin company (“Sikorsky”), for many of their military

helicopter platforms including the UH-60 BLACK HAWK©, CH-53E and CH-53K, and a special

purpose helicopter;

Corporation, formerly Raytheon Technologies – we provide products to two

business divisions of RTX Corporation:

Raytheon (Next Generation Jammer – Mid-Band

pod, Advanced Tactical Pods, Intelligence, Surveillance and Airborne Reconnaissance Pods,

Missile Wings and Components, and Radar Racks) and Collins Aerospace (RF Enclosures);

helicopter platforms including the UH-60 BLACK HAWK©, MH-60 Seahawk, CH-53E and

CH-53K King Stallion, and a special purpose helicopter.

Corporation, formerly Raytheon Technologies – we provide products to multiple

business divisions of RTX Corporation (“Raytheon”):

Raytheon (Next Generation

Jammer – Mid-Band Pod, Advanced Tactical Pods, Intelligence, Surveillance and Airborne

Reconnaissance Pods, Missile Wings and Components, and Radar Racks) and Collins Aerospace

(RF Enclosures).

Boeing Company - we provide critical wing structure for The Boeing Company’s

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Executive Jets – we provide engine inlet assemblies for Embraer S.A.’s

(“Embraer”) Phenom 300 business jet.

(“Embraer”) Phenom 300 business jet and recently were awarded a contract

to manufacture engine inlets for the Phenom 100 business jet.

and 5% of our revenue in 2024 and 2023, respectively, was generated by commercial contract sales.

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We anticipate shipping against these orders into 2025.

addition, in 2015 we won an award to supply structural components and kits for the Wet Outer Wing Panel (“WOWP”) on

the E-2D Advanced Hawkeye airborne early warning and control (“AEW&C”) aircraft that will be manufactured for

the Japan Air Self Defense Force (“JASDF”).

We are responsible for component source selection, supply chain management,

delivery of kits, and providing manufacturing engineering services to NGC during the integration of the components into the WOWP

In late 2019, CPI Aero received additional WOWP kit requirements increasing the total value of this program for the JASDF

to be in excess of $20 million.

CPI completed deliveries in support of this contract in 2023.

February 2020, the Company’s subsidiary WMI received approximately $4 million in purchase orders from NGC to produce numerous

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CPI received follow-on orders for additional quantities

of welded products in 2023 and anticipates additional orders in 2024.

of welded products in 2024 totaling $2.8 million and anticipates additional orders in 2025.

Next Generation Jammer – Mid-Band Pod (“NGJ-MB”):

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the Company was awarded an order of approximately $14.0 million in October 2022, and later definitized at $32.5 million.

2023, RTX issued a Memorandum for Record for Lot4 with an anticipated Program Value of $32 million and an initial funding limit

of $16 million.

We believe that the total value of the NGJ-MB program through production will be in excess of $210 million through

2023, Raytheon issued a Memorandum for Record for Lot4 with an anticipated Program Value of $32 million and an initial funding

limit of $16 million.

In December 2024, Lot 4 was fully funded at $33.4M.

We believe that the total value of the NGJ-MB program

through production will be in excess of $254 million through 2030.

Thunderbolt II “Warthog”:

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In March of 2022, CPI Aero announced

the receipt of additional purchase orders totaling approximately $3.2 million, bringing the total purchase orders received to

$23.4 million.

the receipt of additional purchase orders totaling approximately $3.2 million.

Including additional orders received in 2023, the

total purchase orders received as of December 31, 2024 aggregated $23.8 million.

CPI will finish deliveries on this contract in

Lightning II:

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CPI Aero made its first delivery under that contract in May 2017.

In 2018, the Company received

a new long-term agreement valued at approximately $8 million for lock assemblies to be delivered between 2020 and 2024.

2017, CPI Aero was awarded an additional $15.8 million multi-year contract to manufacture canopy activation drive shaft assemblies

for the F-35A, F-35B, and F-35C variants.

In November 2017, CPI

Aero was awarded an additional $15.8 million multi-year contract to manufacture canopy activation drive shaft assemblies for the

F-35A, F-35B, and F-35C variants.

In 2018, the Company received a new long-term agreement valued at approximately $8 million for

lock assemblies for which deliveries were completed in January 2025.

“BLACK HAWK”:

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for the BLACK HAWK are as a Tier 1 supplier to Sikorsky.

The Company also is a Tier 2 supplier to GKN Aerospace for products ultimately

used on the BLACK HAWK.

In 2017, CPI Aero received an approximately $21 million long-term agreement through 2022 for the production

of fuel panel assemblies, work it has performed for Sikorsky since 2010.

Also in 2017, the Company received an $8 million long-term

agreement through 2022 to manufacture machine gunner window assemblies for the BLACK HAWK, continuing work it has performed since

A third five-year long-term agreement was awarded in January 2022, also for gunner window assemblies, estimated at $13.6

million with a period of performance from 2023-2027.

Also, since October 2018, CPI Aero has received multiple purchase orders

totaling $22 million for hover infrared suppression system (“HIRSS”) module assemblies for use as spares on older

variants of the BLACK HAWK.

The HIRSS is a defensive countermeasures system that is integral to the survival of the BLACK HAWK

by reducing the opportunity for an infrared-seeking threat system to acquire, lock onto, track, and destroy the aircraft.

in May 2021, the Company announced receiving a multi-year contract valued at up to $17.2 million for the repair and overhaul

of outboard stabilator assemblies in support of the Sikorsky MH-60 SEAHAWK .

The Company also is a Tier 2 supplier to GKN Aerospace and Ducommun for

products ultimately used on the BLACK HAWK.

In 2017, CPI Aero received an approximately $21 million long-term agreement through

2022 for the production of fuel panel assemblies, work it has performed for Sikorsky since 2010.

Also in 2017, the Company received

an $8 million long-term agreement through 2022 to manufacture machine gunner window assemblies for the BLACK HAWK, continuing

work it has performed since 2010.

A third five-year long-term agreement was awarded in January 2022, also for gunner window assemblies,

estimated at $13.6 million with a period of performance from 2023-2027.

Also, since October 2018, CPI Aero has received multiple

purchase orders totaling $22 million for hover infrared suppression system (“HIRSS”) module assemblies for use as

spares on older variants of the BLACK HAWK.

The HIRSS is a defensive countermeasures system that is integral to the survival of

the BLACK HAWK by reducing the opportunity for an infrared-seeking threat system to acquire, lock onto, track, and destroy the

Finally, in May 2021, the Company announced receiving a multi-year contract valued at up to $17.2 million for the repair

and overhaul of outboard stabilator assemblies in support of the Sikorsky MH-60 SEAHAWK .

In late 2024, Sikorsky kicked off proposal efforts for the next SEAHAWK PBL commencing in 2027.

Through December 31, 2024, CPI

received orders totaling $6.5 million.

Fighting Falcon:

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The RI/DCC is a large structural sub-assembly that is installed on the tail section of the aircraft.

Deliveries began in 2021 and will continue through 2024.

In June 2020, the Company announced that it had been awarded an order

from Lockheed Martin as part of the previously announced multi-year contract to manufacture RI/DCC assemblies for new production

F-16 Block 70/72 aircraft, in March 2021 the Company announced that it had received an additional order for these assemblies for

$9.2 million and in November 2022, the Company announced another follow-on order for these assemblies for $4 million.

28, 2023 CPI announced the receipt of a 2nd Multiyear long-term agreement with not-to-exceed funding of $34.4M.

The total value

of the RI/DCC program, including both multi-year contracts is approximately $59.3 million.

CPI Aero deliveries began in 2021.

In June 2020, the Company announced that it had been awarded an order from Lockheed Martin

as part of the previously announced multi-year contract to manufacture RI/DCC assemblies for new production F-16 Block 70/72 aircraft,

in March 2021 the Company announced that it had received an additional order for these assemblies for $9.2 million and in November

2022, the Company announced another follow-on order for these assemblies for $4 million.

On August 28, 2023 CPI announced the

receipt of a 2nd Multiyear long-term agreement with not-to-exceed funding of $34.4 million.

The total value of the RI/DCC program,

including both multi-year contracts is approximately $60 million.

In 2024, Lockheed initiated proposal efforts for the next pricing

period, the anticipated LTA3.

King Stallion:

The CH-53K is a heavy-lift helicopter being developed by Sikorsky for the U.S.

The CH-53K is a heavy-lift helicopter produced by Sikorsky for the U.S.

Marine Corps.

We manufacture

composite electronics racks as a Tier 2 supplier to Spirit AeroSystems, Inc., the manufacturer of the CH-53K cockpit and cabin.

Through December 31, 2023, we had received orders valued at more than $2.7 million from Spirit AeroSystems, Inc.

addition, the Company also manufactures welded tubes for the CH-53K as a Tier 1 supplier to Sikorsky.

In August 2023, CPI received

a Long-term Agreement with a ceiling price of $17.4 million and a funding limit of $7.3 million.

These tubes will be required

for the multi-year on this program.

A component of this statement of work also includes CPI Aero intellectual property.

We manufacture composite

electronics racks as a Tier 2 supplier to Spirit AeroSystems, Inc., the manufacturer of the CH-53K cockpit and cabin.

December 31, 2024, we had received orders valued at more than $2.8 million from Spirit AeroSystems, Inc.

addition, the Company also manufactures welded titanium and aluminum tubes for the CH-53K as a Tier 1 supplier to Sikorsky.

August 2023, CPI received a Long-term Agreement with a ceiling price of $17.4 million and a funding limit of $7.3 million.

tubes will be required for the multi-year on this program.

This statement of work includes CPI Aero intellectual property.

Pod Structure:

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The program value as of December

31, 2023 was $8.4 million.

31, 2024 was $9.5 million for deliveries into 2025.

CPI Aero has been awarded the follow-on to this development statement of work.

In 2018, the Company started production of a welded tank for NGC for an undisclosed application on an undisclosed

The total value of orders received as of December 31, 2024 is $3.2 million.

Anticipated spares orders are expected to

continue in 2025.

In late 2021, the Company received an initial purchase order from Raytheon to manufacture radar rack structures

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The non-recurring and tooling phase of the

program was completed and the initial 11 racks will be delivered in 2024.

program was completed and the initial 11 racks have been delivered in 2024.

CPI submitted proposals for follow-on lots of racks

and an award is anticipated in 2025.

Generation Jammer – Low Band Pod:

In August of 2024, the Company received a letter contract from a new customer,

L3Harris Technologies to manufacture pod structures for the Next Generation Low Band Program.

The estimated value of this first

development phase of the program is $12.1 million with initial Purchase Order funding received in fourth quarter of 2024 of $5

million for long lead material, manufacturing engineering services, development of assembly tooling, and the production of the

initial units.

Aircraft – Prime Contracts with U.S.

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funded orders totaling $5.0 million.

The Phenom 100 is a light executive business jet twin-engine, produced by Brazilian aircraft

company Embraer that can carry up to six passengers and a crew of two.

Embraer unveiled the Phenom 100EX, the Company’s latest

evolution from the Phenom 100 series with over 400 aircraft in operation.

Embraer has informed us in December 2024 that we have been

selected to produce the engine inlets for this aircraft.

We anticipate our first deliveries to take place in 2025.

produce custom assemblies pursuant to long-term contracts and customer purchase orders.

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total backlog as of December 31, 2024 and 2023 was as follows:

$ 118,218,000

$ 122,148,000

$ 513,351,000

$ 514,500,000

Approximately

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attributable to government contracts at December 31, 2024 and 2023 was as follows:

$ 115,681,000

$ 119,133,000

$ 499,255,000

$ 503,785,000

backlog attributable to commercial contracts at December 31, 2024 and 2023 was as follows:

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onboarding processes.

Over the last year, we have increased diversity on our board of directors to 29% up from 17% in 2022.

executive management team is comprised of 40% diverse employees.

Diversity within our board of directors is 29%, and our executive management team is comprised of 50% diverse

our total employee population and based on employees who self-identify, as of December 31, 2024, approximately 20% of our workforce

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tours with high school and trade school classes.

Members of our leadership team participate on the boards of the local aviation

college and trade associations that support and advance the interests of the local community.

Members of our leadership team participate on the boards of trade associations

that support and advance the interests of the local community.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business