CPI AEROSTRUCTURES FILES FORM 12B-25 NOTIFICATION OF LATE FILING OF ITS ANNUAL REPORT ON FORM 10-K
March 16 2020 - 4:32PM
CPI Aerostructures, Inc. (CPI Aero®) (NYSE American: CVU)
today announced that it has filed a Form 12b-25 Notification of
Late Filing with regard to its Annual Report on Form 10-K for the
year ended December 31, 2019. The Company requires additional time
to complete a review of its procedures for revenue recognition from
contracts with customers for 2018 and 2019 following its February
14, 2020 announcement of an error relating to the Company’s
recognition of revenue under ASC Topic 606 that will require it to
amend its annual report on Form 10-K for the year ended December
31, 2018 and its quarterly reports on Form 10-Q for the quarters
ended March 31, 2018, June 30, 2018, September 30, 2018, March
31, 2019, June 30, 2019, and September 30, 2019 (the
“non-reliance periods”), and to remedy a material weakness in its
internal controls over financial reporting as of the end of each
non-reliance period.
As a result of the pending restatements of its
financial statements, and the fact that the audited financial
statements for the year ended December 31, 2019 cannot be finalized
until the restated financial statements for the non-reliance
periods are completed, the Company was unable to complete its
financial statements and file its 2019 Form 10-K by the prescribed
due date for such filing (March 16, 2020) without unreasonable
effort or expense. The Company intends to include in its Annual
Report on Form 10-K for the year ended December 31, 2019, restated
financial statements and other disclosures for the non-reliance
periods as soon as reasonably practical.
In addition, shortly after its February
announcement, CPI Aero engaged one of the four largest
international accounting and auditing firms to advise and assist
management in correcting the material weaknesses and preparing and
implementing proper revenue recognition procedures.
Douglas McCrosson, president and CEO of CPI
Aero, stated, "We have made good progress towards preparing the
required financial statements and remain committed to filing
restated financial reports and other disclosures for the periods
affected as reasonably practical. To that end, we have completed a
review of the major contracts with customers and are in the process
of completing detailed revenue recognition rules for each contract.
The final step will be to apply these rules to determine the
revenue and profit contributions for each contract during each of
the financial reporting periods.”
Concluded Mr. McCrosson, “Based on our review to
date, I want to reiterate that we do not believe this error will
have an impact on the reported operating cash flows of the company
during the affected periods or on future cash flows going forward.
We continue to execute on our record backlog of orders from our
world-class aerospace OEM customers and the U.S. Department of
Defense, and no customers have cancelled contracts since the
February announcement.”
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. CPI Aero is included in the Russell Microcap®
Index.
When used in this press release, statements
about the Company’s plans to amend its financial statements, the
timing of such amendments, and their effect on the financial
statements, which may be indicated by the words or phrases
“management expects” or “the Company expects,” “is anticipated,” or
similar expressions, are intended to identify “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those expressed in these statements, including,
among others: the timing and nature of the final resolution of the
accounting issues discussed in this press release, any delay in the
filing of required periodic reports, the timing and results of the
Company’s review of the effectiveness of internal control over
financial reporting and related disclosure controls and procedures,
whether a restatement of financial results will be required for
other periods or for other accounting issues, adverse effects on
the Company’s business related to the disclosures made in this
press release or the reactions of customers or suppliers, any
adverse developments in existing legal proceedings or the
initiation of new legal proceedings, and volatility of the
Company’s stock price. Additional risks are included in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2018. Because the risks, assumptions, and uncertainties
referred to above could cause actual results or outcomes to differ
materially from those expressed in any forward-looking statements,
readers are cautioned not to place undue reliance on any such
forward-looking statements, each of which speaks only as of the
date made. The Company has no obligation to update any
forward-looking statement to reflect events or circumstances after
the date hereof.
CPI Aero® is a registered trademark of CPI
Aerostructures, Inc. For more information, visit www.cpiaero.com,
and follow us on Twitter @CPIAERO.
Investor Relations Counsel: LHA Investor
Relations Sanjay M. Hurry / Jody Burfening (212) 838-3777
cpiaero@lhai.com www.lhai.com
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