CVU

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How CVU rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements.
Government and its agencies and a significant portion of our business depends on government contracts.
Government, if our relationship with individual federal agencies were impaired, or if the U.S.
Government otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our business, financial condition, and results of operations could be materially adversely affected.
We depend on a limited number of prime contractors and government customers for a significant portion of our revenue.
A significant portion of our revenues is derived from programs performed for a limited number of prime defense contractors and government customers.
These significant customers – Raytheon, Sikorsky, Lockheed Martin, and the United States Air Force – constituted approximately 38%, 20%, 11% and 11%, respectively, of our 2025 revenue.
Our revenues from these customers are diversified over several different A&D products, programs, and subsidiaries within these customers.
However, any significant change in production rates by any of these customers would have a material effect on our results of operations, and cash flows.
There can be no assurance that these customers will continue to purchase products from us at current levels, that we will retain these relationships, or that we will be able to establish comparable relationships with other customers if one or more of these customers reduces or terminates its business with us.
A significant portion of our revenue is derived from a limited number of aerospace and defense programs.
Production levels for specific aerospace or defense programs may vary due to changes in government funding, customer demand, program priorities or technical issues.
If production levels for programs on which we depend are reduced or if those programs are delayed, terminated or experience lower demand, our revenues and results of operations could be adversely affected.
Our backlog may not be indicative of future revenue and may not result in realized revenue.
Our backlog represents the estimated value of expected future sales under existing contracts and purchase orders.
However, backlog is not necessarily indicative of future revenue to be realized or the timing of such revenue.
Production quantities and delivery schedules under existing programs may change, and customers may modify, delay or cancel orders.
In addition, many of our contracts are subject to engineering changes, scope modifications, contract adjustments or requests for equitable adjustment, which may affect program scope, pricing or delivery schedules.
As a result, the amounts included in backlog may change over time and may not be realized as revenue in the periods we expect or at all.
In addition, a portion of our backlog relates to long-term production programs that may extend over several years.
These programs are subject to changes in production rates, program requirements and other factors that may affect the timing and amount of revenue recognized.
Backlog amounts may also reflect assumptions regarding production quantities, pricing, contract scope and other factors that may change over time.
Changes in program requirements, production schedules, contract terms or customer demand could affect our ability to convert backlog into revenue and could adversely affect our results of operations and financial condition.
We may experience liquidity constraints if we are unable to finance working capital requirements associated with our contracts.
Our business requires significant working capital to support the production of complex aerospace and defense aerostructures and aerosystems.
Under many of our contracts, we must incur costs for materials, labor and production activities before receiving corresponding customer payments.
As a result, we may be required to finance inventory purchases, long-lead materials, engineering work and other production costs for extended periods before reimbursement through contract billings or milestone payments.
Our working capital requirements can vary significantly depending on, among other things, the timing of new program awards, the completion of mature programs, the ramp-up of new production programs, production schedules, changes in production rates on existing programs, inventory requirements and the payment terms with our customers and suppliers.
In certain circumstances, customer payment terms may require us to fund production activities before receiving payment, while our suppliers may require shorter payment terms, deposits, price increases or other changes in commercial terms, which may significantly increase the amount of working capital required to support our operations.
In addition, many of our contracts are subject to engineering changes, scope modifications, customer-directed design changes or other contract adjustments.
In some cases, we may be required to perform additional work or incur additional costs before the related pricing adjustments are finalized with the customer, including through requests for equitable adjustment or other contract modifications.
The negotiation, approval and recovery of amounts associated with these adjustments may take significant time and may not align with the timing at which we incur the related costs which may require us to finance those costs for extended periods.
Our liquidity position may also be affected by the need to maintain inventory for production programs, including long-lead materials detail parts, and by changes in supplier pricing or payment terms.
In addition, changes in production schedules, program delays or reductions in production rates by our customers may affect the timing of revenue recognition and cash receipts while we continue to incur production costs.
As a result of these factors, our cash flows from operations may fluctuate and may not always be sufficient to fund our working capital requirements.
At times, our liquidity may become constrained, particularly if program changes, payment delays, supply chain disruptions, production rate changes or other operational factors increase our working capital needs, or if financing is not available to fund those requirements.
We currently rely in part on borrowings under our credit facility to support our working capital requirements, and our ability to access that financing may be critical to funding production activities prior to receiving customer payments.
If our cash flows from operations and available borrowings are insufficient to meet our working capital needs, we may need to obtain additional financing or take other actions to manage liquidity.
There can be no assurance that such financing would be available on acceptable terms, or at all.
Any inability to adequately finance our working capital requirements could adversely affect our ability to execute our production programs, convert backlog into revenue, meet production schedules and satisfy our ongoing operating and contractual obligations.

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Gone since FY2024

Item 1A: Risk Factors” in this Annual Report on Form 10-K, could cause our actual results to differ materially from those expressed in our forward-looking statements.
We assume no obligation to revise or update any forward looking statements for any reason except as required by law.
The forward-looking statements contained in this Form 10-K speak only as of the date of its filing.
Except where required by applicable law, we expressly disclaim a duty to provide updates to forward-looking statements after the date of this Form 10-K to reflect subsequent events, changed circumstances, changes in expectations, or the estimates and assumptions associated with them.
The forward-looking statements in this Form 10-K are intended to be subject to the safe harbor protection provided by the federal securities laws.
You should read the financial information set forth below in conjunction with our consolidated financial statements and notes thereto.
BUSINESS General CPI Aerostructures, Inc., including its wholly owned subsidiary Welding Metallurgy, Inc.
(“WMI”) and Compac Development Corporation, a wholly owned subsidiary of WMI (collectively, “CPI Aero”, the “Company”, “us”, or “we”) is a manufacturer of structural assemblies, integrated systems, and kitted components for the domestic and international aerospace and defense (“A&D”) markets.
Our products are generally used by customers in the production 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.
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.
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.
CPI Aero has over 45 years of experience as a contractor.
Our team possesses extensive technical expertise, program and supply chain management, and integration capabilities.
Our competitive advantage lies in our ability to offer large contractor capabilities with the flexibility and responsiveness of a small company, while staying competitive in cost and delivering superior quality products.
We maintain a website located at www.cpiaero.com .
Our corporate filings, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and reports filed by our officers and directors under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any amendments to those filings, are available, free of charge, on our website as soon as reasonably practicable after we electronically file such material with the SEC.
The contents of our website are not incorporated in or otherwise to be regarded as a part of this Annual Report on History Conceived and started as a technical consulting firm on January 11, 1980, within a few years, Composite Products International Inc.
(“CPI”) was manufacturing aircraft structural components for U.S. military aircraft under contract to the U.S.
By the late 1980s, CPI was also providing structural components for civil aircraft in the commercial market.
In the 1990s, CPI became a publicly traded company and changed its name to CPI Aerostructures, Inc.
The Company continued to grow, both in size and in its business.
Government contracts served as the mainstay of CPI Aero’s business, and the Company continued to grow its presence in the commercial market as well.
Commitment to customer satisfaction and pride in a job well done propelled CPI Aero to the forefront as a reputable and hardworking supplier to OEMs.
On September 5, 2000, CPI Aero shares were listed on the American Stock Exchange (now known as NYSE American).
We also started to focus on diversifying our business model to pursue more commercial contracts.
In 2007, the Company won three major contracts and experienced great growth and expansion.
In 2018, CPI Aero acquired Welding Metallurgy Inc.
This allowed for a small but strategically important amount of vertical integration in complex fusion welding and large diameter tube bending capability.
The acquisition included Miller Stuart and Compac Development Corporation, two other business lines that added fabrication of electrical cables, harnesses and enclosures to the Company’s capabilities.
Today, CPI Aero continues to engage in traditional high quality structural assembly manufacturing while incorporating the latest in technology to improve quality and streamline production.
Our success is rooted in our core company values, the dedication and skill of our employees, and our commitment to providing our customers the full-service solution they require.
Products and Services We offer design, engineering, manufacture, build, MRO services, and supply chain and kitting services capabilities to the A&D industry as follows: ● Aerostructures: New Production and Repair/Overhaul of Fielded Wing Structures and other Control Surfaces, Rudder Island, Engine Inlets/Nacelles, Engine Exhaust Manifolds, Aircraft Doors and Windows, Aircraft Steps and Racks, and other Aircraft Secondary Structures ● Aerosystems: Airborne Pod Structures and Integration of Internal Systems, Radar Housing Structures, Panel Assemblies, Mechanical Door Locking Systems, and Canopy Lifting Systems ● Large Diameter Tube Bending: Complex Ducts and Tubes in Steel, Aluminum, Titanium, and Nickel Alloys ● Complex Specialty Welding: Fusion Welded Fluid Tanks and Resistance Welding (Spot and Seam) of complex metallic assemblies ● Electrical Cables, Harness, and Enclosures: Wire Harnesses, Power Control Systems, Fuel Management Systems, Power Distribution Systems, Fully Integrated Electrical Control Systems, and RF enclosures Engineering Services and Capabilities As 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.
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.
We have significant experience working in a full model-based definition environment, both CATIA and NX, due to our long sustainment support on older airframes.
CPI Aero also possesses the capability to work with traditional blueprints, mylars and loft.
The Company has executed several projects where older engineering data sets were “rehabilitated” to fully model-based datasets per customers’ requests.
CPI Aero is capable and has experience in designing many types of assembly type tools up to and including large floor mounted, articulated tooling at high levels of precision.
We are also capable of designing various types of tooling that can be 3D printed for rapid response.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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