CPI Aerostructures Inc (CVU) 2010 Q4 法說會逐字稿

Please stand by for real-time transcript. Greetings and welcome to the CPI Aerostructures Incorporated 2010 fourth quarter financial results. At this time all participants are in listen-only mode. (Operator Instructions) As a reminder this conference is being recorded.It is now my pleasure to introduce your host, Edward Fred, President and Chief Executive Officer for CPI Aerostructures, Incorporated. Thank you, Mr. Fred, you may begin.

Good morning and thank you all for joining us for our fourth quarter and year-end 2010 conference call. If you need a copy of the press release issued this morning, please contact Linda Latman at the Equity Group at 212-836-9609, and she will fax or e-mail a copy to you. Also, if you would like to listen to this call again, you can hear a replay on our website Investor Relations section in about an hour at www.cpiaero.com. Before we get started I want to remind investors that this conference call will contain certain forward-looking statements which involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from projected results.

Included in these risks are the government's ability to terminate their contracts with us at any time, the government's ability to reduce or modify its contract if its requirements or budgetary constraints change. The government's rights to suspend or bar us from doing business with them, as well as competition in the bidding process for both government and subcontracting contracts. Our subcontracting customers also have the ability to terminate their contracts with us if we fail to meet the requirements of those contracts or if their customer reduces or modifies its contracts to them due to budgetary constraints. Given these uncertainties, listeners are cautioned not to place undue reliance on any forward-looking statement contained in this conference call.

Additional information concerning these and other risks can be found in our filings with the S.E.C. This morning I will give you a brief overview of our 2010 full-year results as audited and preadjusted. I will then hand the call over to Vince Palazzolo, our CFO, so he can walk you through the financial statement details, then I will comment on the current business environment, our guidance for 2011 and 2012, and briefly wrap things up and open the call to questions.

As reported earlier this morning, for the year ended December 31, 2010, revenue reached an all-time high of approximately $43.99 million. Pre tax income was approximately $543,000 compared to 2009's pre tax income of approximately $5,861,000. Net income was approximately $530,000, or $0.08 per diluted share compared to approximately $3,946,000, or $0.64 per diluted share for 2009. Selling, general and administrative expenses for 2010 were approximately $5,415,000, or 12.3% of revenue compared to approximately $5,198,000, or 11.8% of revenue for 2009. Forward contract awards for the year were a record $61.7 million.

Preadjustment 2010 year-end results which are unaudited were as follows. Revenue was approximately $51.1 million compared to $43.9 million in 2009, an increase of approximately 16.4%. Gross margin was approximately 26% as compared to 26% also in 2009. Pre tax income was approximately $7.2 million as compared to $5.9 million for 2009, an increase of approximately 22%. And net income was approximately $5 million compared to $3.9 million in 2009, an increase of approximately 28.2%. So with that prelude, let me introduce Vince Palazzolo so he can walk you through the details of the quarter.

Thanks, Ed. As reported in this morning's press release comparing the final quarter of 2010 to the final quarter of 2009, revenue was $7,464,546, compared to $12,729,858. Gross margin was a negative 45% as compared to a positive 30%. Pre tax loss was $4,758,535, compared to a pre tax income of $2,240,661. Net loss was $2,965,535 or $0.44 per diluted share, compared to net income of $1,559,661 or $0.25 per diluted share. Selling, general, and administrative expenses were approximately $1,364,000, or 18.3% of revenue compared to approximately $1,509,000 or 11.9% of revenue. At this point let me hand the call back over to Ed for an overview of the business.

Thanks, Vince. Our pre adjusted results demonstrate that we met our projections for 2010 and operationally had better results than 2009. However, as we reported in January 2011, the Department of Defense opted to terminate the T-38 program one release earlier than expected, and this caused the Company to revise its revenue estimates. This noncash adjustment is a GAAP change in estimate and conforms to the procedures used for percentage of completion method of accounting. The DOD placed purchase orders for 9 of the 10 projected years of the T-38 program. By not placing an order for the final lease on the program the value of the contract approximated $56 million instead of the $61 million contract that CPI Aero had estimated. This program was accounted for using percentage of completion method.

In accordance with GAAP, percentage of completion method permits a company to develop estimates of completion or EACs for the life of the program. At that time of the contract start in 2001 we applied a more conservative approach projecting only one fiscal year ahead of what was on firm delivery orders versus developing an EAC for a 10-year period. The method used for the T-38 contract resulted in a revenue adjustment based on a change in estimate. We currently have two other contracts subject to early termination completion that accounted for in a similar manner on which based on the current facts we have also adjusted revenue based on changes in estimate. Such adjustments have the effect of eliminating the possibility of similar revenue adjustments on these ongoing contracts in future years.

In addition, on all but these three contracts, if a program is terminated early, there would not be a significant revenue adjustment as the current estimates reflect revenue only for orders released by the customer. It is important to focus upon the following points. Pre adjustment CPI Aero achieved its guidance levels as anticipated. These adjustments do not impact our guidance provided for 2011 and 2012. 2011, we continue to expect revenue to be in the range of $78 million to $81 million with resulting net income in the range of $9.2 million to $9.5 million. In addition we estimate that for 2012 revenue should be in the range of $88 million to $91 million with resulting net income in the range of $11 million to $12 million. The three-year compounded annual growth rate provided by CPI in 2008 for both revenue and net income is still intact and unadjusted.

The 2010 pre adjusted results included only $550,000 of revenue from these three programs. So the impact was minimal at best and would not have impacted our ability to attain our guidance levels. In fact, the margin contributed by these jobs was negative. So net income would have been higher had they not been included in the results. Our 2010 and, I'm sorry, our 2011 and 2012 guidance did not anticipate any revenue from these three programs. These adjustments do not impact continuing operations in any way other than the CPI will pay less income taxes for 2010 and lastly, contract awards for 2010 of $61.7 million set a new record which we expect to build upon.

Thus far this year we've already booked approximately $22.1 million of additional contract awards. On a separate note, CPI Aero will continue to tell its story as often as possible over the next few months, and to that point we presented at the Cowen 36th annual aerospace and defense contract on February 10, in New York City and we are scheduled to present at the following financial and/or aerospace and defense conferences in the next two months. The Roth 23rd annual growth stock conference on Monday, March 14, in Laguna Niguel, the Noble Financial 7th annual equity conference on May 16th and 17th in Ft. Lauderdale, The B. Riley & Company 12th annual investor conference on May 23rd through May 25th in Santa Monica, California. And the Stephens Spring Investment conference on May 24th and May 25th in New York City.

We look forward to seeing some of you there as we have in other years. We look forward to the next two years with great anticipation and excitement as we execute on our current contracts, develop new customers and deliver unprecedented financial results for our Company. At this point I would like to open the floor to questions. Diego, can you allow callers to place questions now, please.

Thank you, sir. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from Rick Hoss with ROTH Capital Partners. Pleas state your question.

Hi, good morning.

Hi, Rick.

Ed, the solicitations versus last year I think were higher, if I'm not mistaken. I have it at $270 million last year in the fourth quarter and then was it $384 million last quarter?

That's correct. And now it's $486 million.

Correct, of the solicitations that you have this year, I guess versus last year, what percentage are commercial versus military this versus last year?

I would say to that you probably 90% of the growth is -- I'm not going to call it commercial necessarily, I'll call it non-military, meaning commercial and or Biz jets. About 90% of that growth is in that area.

Okay. So the incremental increase in solicitations, most of it came from the non-military side of business.

Correct.

And the conversion of solicitations, and I guess we'll have to go compare '08 to '09 in this case, what's the trend? Is it flat? Is it increasing? Is it decreasing? How should we look at it?

I think it's hard to categorize, only because the level at which we are now submitting bids has increased substantially from where it was in '08 versus '09. It remains to be seen at this moment what that conversion rate is. All I can tell you is that we're very, very excited about what we have in for bid right now, and what our potential is for victories on a lot of these. But there isn't a true, what I'll call conversion rate.

If you look at 2008, theoretically I can say to you dollar-wise our conversion rate was ridiculously high because the three biggest things we had in the pipeline were the E-2, the A-10, and the G650, and, oh wow, we won all three of those so that could skew it somewhat. We're more diverse now even in the bids we have out there. I don't expect to win, 95% of the $486 million that's out there. But then again we don't need to. I think -- I really owe that's really all I can say to you on it. I don't know that I can compare apples to apples for you, because they really don't exist right now.

Okay, that's fair. As far as '11 and '12 guidance, what percentage of military versus non-military? Roughly.

I'm going to classify this for you. If we are providing a product for Boeing, it's on a military contract for them, we call that military. So with that as the lead-in, both years, we're still looking right now at 65% military, about 35% non-military.

Okay. And so when we think about scenarios of -- which would require an increase to guidance, the likelihood of that increase would come from non-military type of orders?

That's pretty much correct, Rick. There might be one exception, but you're right, in general it will come from non-military orders.

Okay. Last question, Vince, can you give me a percentage distribution for the guidance in just '11? How should we think about -- say call it $80 million in revenue. How is that distributed amongst the quarters?

We normally don't do quarterly guidance there is not an unusual spike in any quarter. Let me say that. I can't say that it will be straight line across or straight line up, but there's no unusual -- there's no unusual quarters. First should be lowest, fourth should be highest. The two in the middle should be about average.

That's fair. So first quarter lowest, two and three kind of flat with each other, with respect to each other in the middle, then the fourth highest.

That's what we basically do historically, Rick.

Okay, that works. Thanks.

Thank you. See you next week.

Our next question comes from Marco Rodriguez with Stonegate Securities. Please state your question.

Good morning.

Hey, Marco. How are you?

I'm doing well. And yourself?

Good, thanks.

I have a couple quick housekeeping items to run through real quickly. Wondering if you could kind of review the sequential increase on accounts receivable and the balance sheet. Also looks like you used your LC in the quarter. And can you provide cash flow from operations and CapEx for the year? And if you take out all the non cash charge, what would the diluted share count have been, for the quarter?

The share count would remain the same. The non cash charges were about $386,000 in depreciation and amortization and about $554,000 worth of charges for stock options. Those are non cash charges.

I meant the revenue. If you take out the $7.2 million charge you would have had a positive net income.

That's correct.

I'm assuming the 6.7 million shares is basic. So what would have been fully diluted had you had that positive income for the quarter?

Oh. We have about 270,000 incremental shares in the quarter had we had a positive fourth quarter.

Okay.

We had incremental shares for the full year because we did still have a positive full year.

Okay. And then the receivables line of credit cash flow, CapEx? Any color behind those?

Well, the receivables -- when you say receivables, are you asking about pure account receivable or the CE & E account?

Just the pure receivables.

It's higher, because we had a higher shipping against some of the bigger orders at the tail end of 2010 -- I almost said 2011, sorry -- 2010, plus we have some progress bills that we were allowed to do on the bigger orders that we had reached a couple of milestones on, and that's sitting in accounts receivable.

Has that come down at all? Are we at the same level?

It should be down by the quarter end, although we may have some more progress bills at the end of the quarter but I would say the receivables should be down by the end of the quarter.

Can you talk a little bit about the line of credit what you're using that for?

The line of credit is being used to pay the high procurement levels on those big orders. Although we do get progress payments, we only get a percentage against it, and we haven't gotten the full amount yet. We haven't received those progress payments yet or hadn't at the dated of the financial statement so we withdrew against the line or to cover that.

Are you expecting that to go down next quarter or the next couple quarters, or how should we think about that?

I would say that's depending on how we do with all of our shipping, it could go down, it might not go down, depending on the way that our procurement levels are at the tail end this quarter. We've still got a couple weeks, and we do have a lot of stuff that's been coming in. So it's possible that could still be high.

It will also depend, Mark, on how quickly our customers pay their progress payments, et cetera.

Right.

But all it is at this stage is timing.

Okay.

By later in the year, we catch up to production versus progress payments and milestones, and that goes away.

Okay. And cash flow from operations for the year and CapEx?

For 2010?

2011.

I'm sorry?

For 2010.

Cash flow from operations was extremely negative, about $4 million negative because of the big buildup in the CE & E for the big programs. CapEx was only $301,000.

Okay. And then lastly, I was wondering could you discuss where you are right now versus expectations on the production cycles for the A-10, the E-2D, and the G650. Any sort of color on timing also would be helpful.

The production cycles, we're right where the planning is on those jobs. It was anticipated, I should say, on those jobs. They are in the ramp-up stage still, which is what's causing some of that cash flow that we -- cash flow, negative cash flow that we discussed just a couple minutes ago. So I would say that the cycle still has another four or five months to go before we begin the turn around and start the heavier shipping portion of those jobs.

That's helpful. And then lastly, just following up on a previous question in regard to, I guess the close rate on the bids outstanding, can you provide any sort of range which you might be thinking about going forward?

Not really. First of all, I'm not sure what we're going to get. I'm personal optimistic. I'll say that as Ed Fred, not as the CEO of the Company that we're going to win our -- really, more than our fair share of some of this bidding. A lot of it is in our sweet spot. It's in the niche we produce in. The complex structure that a lot of the smaller guys can't do and a lot of the bigger guys can't do as cheaply as we can. So we're very encouraged about what the rest of the year looks like on new awards.

The other thing that I think should encourage anybody listening, anybody watching CPI it is a encourages us, is the growth in that account. As Rick said in the last question last year this time, $270 million. Last time we reported, $384 million. Now $486 million. So we've more than doubled the number of bids outstanding from a year ago, let's say, and we're up over 25% from where we were two months ago when we reported to you. What that means is obvious. Yes, we're bidding on more but you've got to read deeper into it.

It's not as if we can just go out, find bids, and bid it up and make that account look good. These are potential customers or current customers on potentially other things, who have either asked to us bid or sent us bid package as part of their procurement process, which means that CPI is earning a reputation as a tremendous provider of structural aircraft parts. I can tell you without categorizing it for you there are a myriad of new customers in this $486 million number, and they came to CPI and asked us if we would bid on things for them. So they're hearing about us throughout the industry now.

So to us, that's extremely exciting. We're going to have a quarter somewhere, guys where, that number goes down. It will go down because, A, we won't win everything we bid on, and it will be removed from the list. Or B, we will win a whole bunch of stuff, and it will just make that number go down. The fact, though that we've been able to grow to the almost $0.5 billion and even if the does go down, we know we'll refill it going forward, because of the activity we now have with the entire aerospace industry, bodes extremely well, not just for '11 and '12, but for the out years after that '13 through '15, '16, '17. Everything that's big that we bid on basically has a five to six-year life. So anything we were to win this year, you're looking at it generating revenue at a minimum through 2016 and probably longer.

Inside the bids outstanding, are there any larger than normal bids or anything that's kind of skewing the weight, if you will?

Well, perhaps with some customers, yes. As I've reported numerous time, we've got $125 million of that number, I guess it's $115 million now, or something like that, with Sikorsky. It's not one contract for $125 million, obviously. So in other words, we didn't just submit $100 million contract to somebody, and that's how the number bounced. We may have other customers where we've submitted $50 million, $75 million, $100 million worth of bids, but it wouldn't be on one piece.

Alright, great. That's what I was looking for. Thanks a lot.

Take care, Marco.

Next question comes from Michael Potter with Monarch Capital Group. Please state your question.

Hi, guys. Congratulations on continued progress and moving forward.

Thanks.

A couple of questions. With the gold certification by Sikorsky, has that enabled us to start bidding on other work from United Technology?

I think we've seen one proposal from a non-Sikorsky company within the United Technology family. Quite frankly, it wasn't anything that we would be interested in building, but it did indicate exactly what supplier gold is supposed to indicate, and that is that every division in Sikorsky now when they're looking for something of a structural type starts with the gold supplier list. This is part of an organization of Sikorsky we had never dealt with before. We didn't even know the people's names, and they came to us and said would you like to bid on this or can you bid on this or would you take a look at this. So yes, I believe the system works, if that's the question.

Okay. Great. Have we started an outreach to the other divisions ourselves?

Absolutely.

Being proactive?

Absolutely. We have people travel to Sikorsky once a week, usually every Thursday. Their visits now have expanded outside Sikorsky and once a week we're visiting another division of UTC.

Terrific. Can you give us an update on, I guess, the non-Sikorsky helicopter manufacturers? Are we making any progress adding them to our client list?

We're working extremely hard. I have not hidden the fact that we're working on Bell very, very hard. We've submitted things to them. We're encouraged by some of the feedback we've gotten from them. Like anything, and like Sikorsky was and like Northrop Grumman was and like Boeing was, it's a process of a couple of years in a lot of cases, and certainly with something like that to generate one of those companies as a customer.

Now, we truly feel that we're very close to that stage where we will be able to call Bell a customer in the near future, and the same is true, perhaps with a couple of other executive jet manufacturers. As I've put in my presentation which you've seen and probably everybody on the phone has seen, we go after Bombardier, we've talked to Cessna, and we're cultivating those relationships as well. Unfortunately none of it ever happens as fast as we'd like it to.

But these are hopefully 2011 events.

We sure hope so you bet.

All right. And speaking of the G650, the plane is in production currently?

It's not in production, per say. They are building their first couple of production models. I would not say to you it's an in-production aircraft yet. It doesn't have FAA approval yet, and they're still doing testing on a lot of it. But everything the CEO of GD says is that this plane, the first production units will be delivered at the tail end of 2011, and then they will produce production levels in 2012 and beyond. But it's not like they're rolling one off month at this stage.

And are we in talks with them -- we have the leading edges. Are we still talking with them about potentially getting the trailing edges back?

Yes, absolutely. Trailing edges and flaps. We want them back. We've had conversations with them. Right now quite honestly I think their Spirit's focus is on making sure Gulfstream gets everything it needs for this first round of production stuff. We've been told by Spirit that towards the tail end of this year, third or fourth quarter, we will sit down and re-evaluate that, and from that perspective, I think what's really important for all of us is the 787 getting back on-line, because one of the reasons Spirit farmed out those three structural parts for the G650 was that they had completely geared up to do all of the offload work they have on the 787.

Now, when that went away, I think they killed a couple of birds with one stone. Yes, A, they were worried about production time, based on engineering, so they wanted to take it in and have ownership of it. But B, they had a whole warehouse and a whole shop and a whole list of employees who were underutilized at that moment. And so this helped fill that gap. But if you go back to the strategy for the reasons that they parceled it out, 787 comes back as is expected soon, and that strategy should come right back into play.

And they've had active discussions with us about this?

Absolutely.

About to ramp-up of the 787 and the need to pull more of their personnel back on to that project?

That is correct.

Okay. On the A-10, how is that progressing, and is there an opportunity to get more work out of Boeing on that project?

Boeing is, in our industrial intelligence tells us that Boeing is trying to become the supplier of all parts good and wonderful on the A-10. They want to be the A-10 repair person, if lurks or the replacement company. And so obviously if we continue to produce as well as we do on the wing elements that we're building, if there's a fuselage part, if there's a flight surface part, if there are tail pieces, anything like that, we think we have a great opportunity to be able to pick up extra work.

But that comes as Boeing gets it. Right now our focus, like Boeing's, is let's just continue to build these parts as quickly and as well as we can, get them to the US Air Force to fulfill their requirements on their program. But again, this is all -- there's not going to be anything that Boeing wins and we get awarded in 2011 on an A-10. So the focus for 2011 is the wing parts that we're building, and I don't think anybody is upset by that or expects to get more right now.

Okay. All right, thanks a lot. Keep up the good work.

Thanks, Mike, take care.

Thank you. (Operator Instructions) Our next question comes from Jay Kumar with Midsouth Funds. Please state your question.

Hi. Good questions. How does the year look like for 2011 right now as you have seen in the last 2.5 months?

What do you mean? Do we --

The Jan and the Feb, how do the months look in terms of revenue growth?

We're right on track right now, for what we expect, but, again, we don't give quarterly guidance but we obviously have our own internal projections of what each quarter should look like.

Is it as good as the first quarter of 2010 or better than first quarter 2010?

I would say to you that's more than likely yes, absolutely, because we're not growing from $50 million to $80 million in a year and doing it all in one quarter. So yes, each quarter of 2010 should be -- I'm sorry of '11 should be better than the quarter was in 2010.

Okay. So the $73 million to $80 million is going to be divided pretty much equally over the four quarters? That's what you're saying?

No, that's not what I said what. I said to you was, we're growing from $50 million to $80 million in 2011.

Right.

And in order to do that we absolutely anticipate that each related quarter, meaning first quarter of '10, first quarter of '11 versus '10, second quarter of '11 versus '10, third quarter, should all be higher than the quarter from last year. As Vince also said, I believe to Rick it was when he asked, the first quarter this year will be the lowest quarter we normally would have. Second and third can vary a little bit who is higher, who is low, but they're usually higher than the first, then the fourth will be the highest quarter we have. That's pretty obvious just by the ramp-up we're doing.

Which of your programs -- what percentage of your revenue is the highest of the program in terms of A-10 or something? What percentage does it make of your revenue?

I don't think we have any program for 2011 that's going to generate more than about 12%.

12%.

We might have one that generates about 15%, but understand, we tend not to break these out. We look at this almost as a group since we won the three of them at that time same time. They all geared up at the same time. Those three programs, E-2, A-10, G650 should generate somewhere in the 40% to 45% range, I guess, in total revenue, for '11.

Do you see any sort of indication, anything wherein these things might get moved off or pushed down, or is it guaranteed to be accomplished in 2011 so you can meet your targets?

Well, look, I can't ever guarantee anything for you. Here's what I can tell you. When you assume that a bulk of our revenue is coming from these three programs, first one, A-10, fully funded, $2 billion program by the US government. Given the uncertainty in the world situation and especially the location of it, being in desserts where, you won't be engaged in any kind of fighter activity, it will be more at a ground kind of thing, the A-10 is the most valuable asset we have in that regard. That plane is getting new wings because the wings are showing stress fractures.

So I don't see that program getting stopped for any reason whatsoever. Plus this year is fully funded, sought wouldn't impact 2011 for us at all. Second one, G650. That would be the only one that would ever concern me because it is subject to world conditions, economic conditions, anything that could go wrong in the world that really didn't -- wasn't designed for the 650, but just has its own impact to the. That said, we're already gearing up to build the 2011 piece of business. So, again, I think if anything were to happen to that plane, it would impact 2012, not '11. And lastly, E-2D.

Again, tensions in the world, everything going on, the E-2 becomes your most valuable resource because it's the only early warning radar plane that can lapped on an aircraft carrier and protect the fleet. So I don't see, even in times of tough defense budgets, I don't see somebody coming along and saying, we're not going to build more E-2Cs, or E-2Ds, I should say now. Could they delay? Yes. But when you're into March of 2011 that makes 2011 pretty much a done deal. The only place I would see these things becoming problematic would be in 2012, and right now we have no indication from anybody, anywhere, that's going to be the case.

All right. Sounds good, thanks a lot.

You're very welcome. Thank you.

Our next question comes from Paul Berger with [Paul B] Associates. Please state your question.

Good morning, Ed.

Hi, Paul. How are you?

Good. A couple small things. One, on the miscellaneous items that you're reporting as contracts that you can't make announcements on, because I believe you used a number of around $0.5 million, do we have any new major names in that category?

No. If there's a new major name, Paul, we will announce that no matter what the dollar value of the contract is.

Also, on the TOPS program, if I remember correctly, it should be ending this spring, and then the structural commodity council contract takes over.

That's correct.

Can you give us any color on that?

Well, the ordering period ends May of 2011. That doesn't mean that we -- business stops. Revenue won't stop. We'll have to build et cetera, but they can't order there that contract any more past May of 2011. The structural commodity council was basically the follow-on to the TOP contract where we were picked as a winner of that contract. It's done a little differently than the TOP was. Us and one or two other companies were picked as the three companies, we're the only three that could bid on any item that was on the structural commodity council award.

That's always seven-year award. So what will happen is when they decide they need something structural for the C-5, they'll go back to that award, they'll look to see if that item is on there, and if it is, they will present it to the three companies who were, quote unquote, winners, and those three will provide their bids. One of those three companies has already dropped out of commodity council win, if will you. They've changed their direction a little bit. They're going after some different things, and so it's really down to us and one other company, a company called Top Flight. This is all public information. It can be found. And so as things occur from that contract, it will be put out to bid between the two of us. We'll win some, we'll lose. Some I'd like to say to you we'll win the ones that are more complex and lose the ones that are less complex, and that's not necessarily a bad thing, quite honestly.

Was there a dollar amount on the ID IQ?

I think there might have been, Paul, but after having lived through the C-5 Top ID IQ dollar amount, I completely ignored it, because the likelihood of them buying everything on it is slim and none based on seven years experienced with the TOP contract. So to say to you tonight ID IQ, $400 million, and I'm just throwing a number out, don't hold me to it, doesn't make any sense. I'd much rather report when I win something, report back, CPI was awarded, blank, blank, blank, for $3 million, and this was pursuant to the structural commodity counsel contract it was awarded in 2010.

One more follow-up on that. How is our relationship with Voight, and where does Voight fall into all this C-5 where what they were awarded. Does that drop out in May?

They are in the same situation as us. Drops out in May of 2011. Both contracts were awarded at the same time. They did not bid on an unrestricted version. Even before they were acquired by Triumph Group. When you say how is our relationship with Voight, it is what it is. Not great, not bad, not anything any more because Voight is basically losing its personality and folding itself into Triumph Group. I think they're going to head in different directions, to be quite honest with you than they did when we dealt with them. You have to remember something. Voight was strictly, solely, and 100% a supplier of commercial structure prior to 9/11.

What made them go into the military side of the house was the fact that commercial got beaten up so badly after 9/11, and they were looking for a way to continue their -- hold on to their employees, to keep their factories fully utilized, et cetera. When they got into the game, I think they were very displeased with what they found out about working with the US government. And to just explain that very quickly, if I can, just to give you folks some color, we got a contract, TOPS contract, valued at potentially $215 million other a seven-year period of time. That was it. The US government ordered every item on the list, and at every highest quantity. That didn't seem outlandish. Some quantities was 17. No quantity was over 51 pieces. There were 109, I think, C-5s at that at the same time we dealt with it. We moved into a bigger facility.

That was a good decision. I know a lot of people say, well, they took on more space than they needed. If you could see what this place looks like right now as far as capacity, you wouldn't think we made a bad decision. But, that said, we dealt with it -- we deal with it as we get orders, and we'll expand, do this, we'll do that. Voight went the other direction. I think the number might be off a little, but, I think it was $473 million. They looked at it very differently. They said to themselves, holy mackerel, if they order 51 of X on our list, we're going need two sets of tools, a whole facility to turn them out on time, et cetera. So they dedicated -- I mean, they built a whole second set of tooling for every part that was on their list, at their own cost.

They also had an entire facility that was just designed for the C-5 top. And their experience mimicked ours. Yes, they got slightly more in revenue than we, did but for a company that expected $473 million, and it got $60 million over a seven-year period, it was a tremendous heartache to them. And I think it made them very, very disenchanted with doing business with the US Government. And that's not to say the US government did anything wrong at all. They go by their needs. Voight anticipated their needs based on thou commercial market goes, and that just didn't work out.

On that, who bid what Voight won on what you got on the structural commodity contract?

They have not submitted that yet to anybody because we were the only company that bid on the unrestricted one. A lot of companies in this country soured on how that contract was administered, and all of the big guys saw what happened to Voight and said, we're not getting that in mess, so nobody bid on it except us. At this moment they don't have the need for those parts. They can do one of two things. They can add them to the commodity council contract we won, or they can go out with them as individual bids every time, and quite honestly, that's probably not the silliest thing to do, given our experience with the C-5 TOP contract and how that was let out. I mean, if there were 108 items on there I bet you we probably built a dozen, and the other 90, or whatever, didn't happen. So it might pay for them on these other items just to go out one at time.

Okay. Great. Thanks and good luck.

Take care, Paul.

Thank you.(Operator Instructions) Our next question comes from [Ron Artinian]. Please state your question.

Hi, Ed. You have been doing a great job so the first thing I wanted to do was congratulate you.

Thank you. Appreciate it.

As a private investor I'm allowed to ask a dumb question. The analysts after lot more information than I do, but I have a very minor question. The main reason for me say going today was to congratulate you on really ramping up beautifully.

Thanks.

Somebody sent me something because they know I follow the Company, about a contract award yesterday. Is that -- was that incorporated into what you talked about? Because it says there's a $7.6 million government contract awarded to you March 8th on www.fedbizops.gov. Is that correct or not? I'm confused if that was something we've already talked about.

It is correct. You just heard us discuss the C-5 TOP contract.

I know it's the TOP. That part of would we've been talking about?

This is a release. This is the way they've don't six or seven years.

So it's kind of a -- it's more of the same.

More of the same, yes, but, certainly it was figured into our guidance that we'd get another release this year.

Beautiful.

It's nice for people to see, you know what, at the end of the day, if this contract wasn't worth $215 million, like we hoped for, right now it's going to be worth $44 million from the time we got it. Had somebody said to me in 2004, here's a $44 million contract to build C-5 parts I would have been doing back flips. So the reason it's not out, unfortunately, the US government kind of short-circuits everything we try to do in that we did not know they were putting it out last night. If you look at the time they put it out, it had just been signed literally an hour before, and we have approval cycles we have to go through with our press releases, et set true.

I completely understand. But that's good news.

oh, it's great news. They just stole my thunder.

I apologize.

Oh, not you, the US government. Not you.

Well, thank you, and continued great job. Thank you.

Thanks, Ron.

Thank you. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference because over to management for closing remarks.

Thank you all. Glad to have you all on the call. We'll be back in about eight weeks. Most of you may have figured out by now, or if you haven't, I'll tell you, we are within a couple of months of beg considered a large filer now, no longer a small filer from an SEC standpoint because our -- the public float of our market tap is over $75 million. So if it is still that case by June 30th of this year, we automatically become a large filer. What we've tried to do here now, as you saw from not only our preliminary release a couple weeks ago but the fact that we announced probably two and a half weeks earlier than we usually do now is we're going to try to announce earlier and earlier, look for something that's 35, 37 days in, and get even better at it as we go along.

So that when the requirement comes that we have less time to file, we're already on board. So you will hear from us in early May, I think, we're shooting for an earnings date of May 4th, if I'm not mistaken. So we'll be on the phone with you guys again in less than eight weeks giving you the first quarter results. So again I thank you all for the support. We truly do appreciate the great comments. We're working hard and we have a lot of people working hard to practices the results we tell you the about. A lot of them go home and listen to the call at night, and your thanking us is also thanking them so we appreciate it very much. So with that, I'll see some of you in Laguna Nigel in three days, and the rest we'll talk to you soon. Thank you.

Thank you. This concludes today's conference. All parties may disconnect now. Have a great day.