CPI Aero Announces $65.7 Million Air Force Contract for T-38 Aircraft Modification Kits
Largest Prime Contract with Department of Defense in 15 Years
July 29, 2019
Edgewood, NY -- CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced that it has been awarded a $65.7 million indefinite-delivery/indefinite-quantity (IDIQ) contract from the United States Air Force to provide structural modification kits, program management, logistics, and other sustainment services in support of Phase 3 of the T-38C Pacer Classic III Fuselage Structural Modification Kit Integration program (“PC III”) and the Talon Repair Inspection and Maintenance (“TRIM”) program. The company also received its first delivery order under the contract valued at $3.4 million for which work will commence immediately.
For more than 50 years, the Northrop T-38 has been the principal supersonic jet trainer used by the US Air Force. PC III and TRIM are expected to increase the structural service life of the T-38 beyond 2030. PC III is a three-phase aircraft modification program that began in 2011 to increase the structural service life of a certain number of T-38C Talon aircraft. Requirements for Phase I were fulfilled by Northrop Grumman Technical Services. In 2015, CPI Aero was awarded Phase 2 of PC III and is currently supplying kits and services to the USAF under that contract through 2021. Under the new contract announced today, CPI will support the final phase of PC III as well as TRIM. The TRIM program is a separate USAF structural modification effort that will extend the structural service life of T-38A and T-38 model types, as well as, T-38C models that were not modified during PC III.
Douglas McCrosson, President and CEO of CPI Aero, stated, “We are honored to have been chosen by the U.S. Air Force to continue our work on PC III and begin work on TRIM , two programs that are essential to the critical mission of training our future military aviators. This contract recognizes our excellent past performance as a prime contractor to the USAF and our long history with the T-38 platform that dates back to 2001. It is a testament to our reputation as an exceptional supply chain partner and leverages the investments we have made in developing world class engineering, supply chain management and program management capabilities.”
For the PCIII Phase III requirement, the period of performance is anticipated as a three-year ordering period, with an additional one year for delivery after an order is placed. For the TRIM requirement, the period of performance is anticipated as a 10-year ordering period, with an additional one year for delivery after an order is placed.
About CPI Aero
CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance and Electronic Warfare 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. 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, 2018, and Form 10-Q for the three-month period ended March 31, 2019.
CPI Aero® is a registered trademark of CPI Aerostructures, Inc. For more information, visit www.cpiaero.com, and follow us on Twitter @CPIAERO.
Contact:
Vincent Palazzolo
Chief Financial Officer
CPI Aero
(631) 586-5200
www.cpiaero.com
Investor Relations Counsel:
LHA Investor Relations
Sanjay M. Hurry/Jody Burfening
(212) 838-3777
cpiaero@lhai.com
www.lhai.com