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0.52x Total Debt / Equity (Moderate leverage)

Moderate-high; ~$40M debt load means 200bps rate rise adds ~$800K annual interest expense, compressing already thin 3-5% net margins by ~15-20%

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

Aluminum/titanium sourcing via Pacific Rim (China export controls risk) and specialty fasteners concentrated in domestic aerospace-grade suppliers with limited alternatives

Minimal currency devaluation exposure; ~90%+ revenue is USD-denominated U.S. defense/commercial contracts; negligible foreign currency revenue

Effectively single-geography (U.S.-based); Amityville, NY primary facility; sovereign currency devaluation risk is near-zero given USD-only contract structure

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

Yes; aluminum and composite raw material suppliers (e.g., Arconic, Novelis) represent critical non-substitutable inputs; single-source risk on specialty forgings

Cloud termination impact is negligible; CPI Aero is a physical aerospace manufacturer with no material cloud-dependent SaaS or digital platform operations

Manufacturing/government-contract services; secondary digital exposure is ERP/MRP systems (likely SAP or similar) — disruption manageable within weeks via on-premise fallback

Minimal API coupling risk; operations are manufacturing-centric with ERP integration; no external API dependencies driving core revenue

Near-zero Howey Test risk; revenue model is fixed-price/cost-plus government manufacturing contracts — no investment contract, profit-sharing, or token-like structure

Medium

Low GDPR/CCPA exposure; primary data is defense contract specs (ITAR-controlled), not consumer PII; ITAR/DFARS compliance is the operative regulatory risk

Low antitrust risk; CPI Aero is a small-cap subcontractor (~$75M revenue) in a fragmented aerostructures supply chain dominated by Tier-1s like Spirit and Ducommun

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

~85-90% recurring via multi-year U.S. government and OEM long-term agreements (LTAs); remainder transactional MRO or short-cycle commercial work

Labor and materials pass-through on cost-plus contracts plus fixed-price-per-unit on LTAs; value captured per flight-structure unit delivered

Cost-plus government contracts provide floor protection; fixed-price commercial contracts expose company to raw material inflation — aluminum +20% would compress margins ~200-300bps

Low-to-moderate; government contracts allow some cost escalation clauses but commercial OEM contracts have limited repricing flexibility; rated 4/10 pricing power

15.2% Gross Margin (Thin (<20%))

No free-rider problem; physical manufactured components have no digital free-riding dynamic; churn risk is contract non-renewal (low given multi-year defense awards)

Highly headcount-linear; aerospace manufacturing is labor-intensive (direct labor ~35-40% of COGS); doubling revenue requires near-proportional skilled workforce expansion

Near-linear marginal cost; no meaningful operating leverage at current scale — new contract wins require capex for tooling plus proportional skilled labor hiring

Not applicable; CPI Aero has no franchise network — it is a direct manufacturing operation under AS9100/NADCAP certifications

At 10x scale (~$750M revenue), unit economics likely improve via overhead absorption but constrained by skilled labor scarcity and AS9100 certification costs per program

No network effects present; value does not increase with more users/customers; competitive moat is purely certification, tooling investment, and program incumbency

-2.3% Return on Assets (Negative equity)

Tier 2 (moderate resilience); U.S. defense contracts (~60-65% revenue mix) are recession-resistant; commercial aerospace (35-40%) is highly cyclical and recession-sensitive

U.S. Department of Defense and prime contractors (Northrop Grumman, L3Harris); top customer likely >30% of revenue — high concentration risk

Commercial OEMs and MRO operators (United Airlines, regional carriers); secondary segment is cyclical and represented meaningful revenue loss during COVID-era downturn

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

0.1% CapEx / Revenue (Low-CapEx Asset-Light)

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