CPI International Holding Corp., the parent company of CPI International, Inc. (CPI), announced financial results for its second quarter of fiscal year 2013 ended March 29, 2013. In the second quarter of fiscal 2013, CPI increased its orders, sales, net income and adjusted EBITDA results in comparison to the same quarter of the previous fiscal year. The company also recorded its highest second quarter sales and largest backlog level ever.
“CPI’s second quarter saw a continuation of the positive momentum and trends that we have enjoyed in recent quarters. Our revenue and profitability continue to grow, demand for our products is healthy, and conditions within our end markets are stable. We have seen no measurable impact from
sequestration and other potential government budget cuts; in fact, our defense market sales and orders each grew by double digits in the second quarter. Additionally, the integration of the Codan Satcom business into our North American facilities has gone smoothly, and this business has had a favorable impact on our communications market sales and orders results this year,” said Joe Caldarelli, chief executive officer.
Orders
For the 12-month period ending on March 29, 2013, CPI’s book-to-bill ratio was 1.13. As of that date, CPI’s order backlog was $307 million, representing the company’s highest ever level of backlog. In comparison to the same period of the prior year, in the first six months of fiscal 2013, CPI’s orders in its largest end markets were as follows:
Net Income and Adjusted EBITDA
Adjusted EBITDA in the second quarter of fiscal 2013 totaled $16.2 million, or 15.9 percent of sales. CPI’s adjusted EBITDA increased from $14.2 million, or 14.7 percent of sales, in the same quarter of the previous year, primarily due to higher total sales in the second quarter of fiscal 2013.
Cash Flow
Fiscal 2013 Outlook
Orders booked during the first six months of fiscal 2013 totaled $264 million, an increase of 35 percent from the same period of the previous fiscal year. A major contributor to this increase was a sizeable multi-year order that was booked in the most recent period for CPI’s advanced tactical common data link (TCDL) antenna products to support intelligence, surveillance and reconnaissance (ISR) military
communications applications.
Sales
CPI’s total sales equaled $102 million in the second quarter of fiscal 2013, increasing six percent from $96.5 million in the same quarter of the previous year. In comparison to that quarter, CPI’s second quarter 2013 sales in its largest end markets were as follows:
CPI’s net income totaled $1.3 million in the second quarter of fiscal 2013, improving from a $0.3 million net loss in the same quarter of the prior year. The increase in net income was principally due to higher total sales in the most recent quarter. Net income in the most recent quarter also benefited from a decrease in intangible asset amortization related to the February 2011 acquisition of CPI by The Veritas Capital Fund IV, L.P. Partially offsetting these positive factors, CPI incurred expenses related to the negotiation, closing and integration of acquisitions, including the integration of the Codan Satcom business into CPI, in the second quarter of fiscal 2013; there were no such expenses in the year-ago quarter.
As of March 29, 2013, CPI had cash and cash equivalents totaling $47.0 million. In the 12-month
period ending on that date, CPI’s cash flow from operating activities was $31.1 million, free cash flow
was $25.2 million and adjusted free cash flow was $27.5 million.
For fiscal 2013, CPI expects:
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