|A-10 Photo: CPI AeroStructures
[Avionics Today 08-08-2014] CPI Aerostructures announced significant losses for the 2014 second quarter, which were considerably impacted by a failed A-10 Wing Replacement Program. CPI Aerostructures predicts the ending of production on their A-10 WRP at about 55 percent of the original planned 242 aircraft, resulting in the loss of investments and the need for the company to borrow approximately $47 million.
"Due to the loss incurred in the quarter ended June 30, 2014, we were not in compliance with net income financial covenant contained in our Credit Agreement with Santander Bank and Valley National Bank,” said CPI Aero's President and CEO, Douglas J. McCrosson, adding to the heavy kickback from the failed program.
As a result, adjusted revenue for the three-month period was approximately $21.0 million in comparison to $21.1 million for the same period in 2013, but revenue will also have to be adjusted in recognized periods dating back to the inception of the program in 2008.
According to a statement from CPI, the long-term future of the A-10 project has been uncertain since March 2014 when the U.S. Department of Defense released its 2015 Budget Request that called for the retirement of the entire A-10 fleet. Further, this bill rescinds funding from the 2014 Defense Budget that was to have been used for the procurement of additional wings for the A-10.