Welcome to CPI Aero's 2014 Third Quarter Results Conference Call. With us today are Mr. Douglas McCrosson, President and Chief Executive Officer, and Mr. Vincent Palazzolo, Chief Financial Officer. After management’s prepared remarks, there will be a question-and-answer session. As a reminder, this conference call will contain 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 the company at any time; the government's ability to reduce or modify its contracts if its requirements or budgetary constraints change; the government's right to suspend or bar the company from doing business with them, as well as competition in the bidding process for both government and subcontracting contracts. Subcontracting customers also have the ability to terminate their contracts with the company if it fails to meet the requirements of those contracts or if the 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 statements contained in this conference call. Additional information concerning these and other risks can be found in filings with the SEC. Now I will transfer the call to Mr. Douglas McCrosson, CPI Aero's President and Chief Executive Officer.

Good morning, thank you. And thank you all for joining us for our 2014 third quarter results conference call. If you need a copy of the press release issued this morning, please contact Lena Cati of the Equity Group at 212- 836-9611 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's Investor Relations section in about an hour at www.cpiaero.com. Before I turn the call over to Vince, who would discuss the details of our third quarter results, I would like to start this call by commenting on yesterday’s new contract announcement. CPI Aero received the multi-year worth approximately $86.1 million from Northrop Grumman Corporation for Outer Wing Panel kits. The kits are to be used in the manufacture of complete wings for the E-2D Advanced Hawkeye and the C-2A Greyhound aircraft. This contract includes approximately $63.6 million in new funded backlog and approximately $22.5 million in requirements that were released to CPI Aero in 2013. CPI Aero has produced Outer Wing Panel kits for the E-2D Advanced Hawkeye and the C-2A Greyhound aircraft, which share a common wing design since June 2008. Securing a long-term defense contract in this budgetary environment requires exceptional program execution, superior product quality and the ability to provide the best value to your customer. We’re proud to be able to continue into the next decade as a key member of Team Hawkeye alongside such great companies as Lockheed Martin, Rolls-Royce, BAE Systems and L-3 Communication. I’ll now hand the call over to Vince Palazzolo, our CFO to discuss our recent financial results and our expectations for 2015. Then I’ll comment on the current business environment, backlog and contract awards and new growth opportunities going forward. I’ll then open the call to questions. Vince?

Thank you, Doug. As announced earlier this morning, during the third quarter of 2014, we saw the impact of our growing commercial business on our top and bottom lines. Our revenue increased by 4% to $21.5 million compared to $20.7 million for the same period in 2013, mainly due to the increased production activity for our newer business jet programs, especially our Cessna Citation X+ Wing Spars program with Textron Aviation and our Phenom 300 engine inlet assembly program with Embraer. During the third quarter of 2014, for the first time in more than 15 years, commercial platforms accounted for more revenue than our defense platforms. While the single quarter does not constitute a trend, it does indicate strength and demand from our commercial aerospace customers. On a full year adjusted basis, we expect commercial revenue to be more than 40% of our total revenue. Gross margin for the quarter was 20.8% and was at the high end of our expected range for the year. Gross margin for our existing programs excluding the A-10 Wing Replacement Program is expected to expand over the coming quarters due to increased output. Our SG&A expenses for the 2014 third quarter as compared to the 2013 third quarter increased by approximately $292,000. This increase was primarily due to a change in investing the stock option grants to our Board of Directors and also due to higher consulting, legal and also accounting expenses. Despite these increases, cost reduction initiatives across our administrative functions have enabled us to keep the SG&A rate down to under 9% of the revenue for the nine months period ended September 30, 2014. We are proud to report that we have substantially improved our operating efficiencies and our current overhead and SG&A rates are in historically low levels. Pretax income for…

Thank you, Vince. From the beginning of the current fiscal through September 30, 2014, we’ve received $87.8 million in new awards, an increase of approximately 5.7% over the first nine months of 2013. The 2014 results include $65.1 million in new defense contracts, an increase of approximately $2.4 million or 3.7% over the same period in 2013. The multi-year contracts for the E-2, C-2 Outer Wing Panel kits accounted for nearly all of the defense business booked so far this year. However, we are in negotiations with Bell and Northrop Grumman for additional order releases for AH-1Z assemblies and pod assemblies respectively that may yet be finalized in 2014. We are seeing strong demands from our business jet customers with $22.7 million in new commercial contracts for the nine-month period ended September 30, 2014. This represents an increase of $2.3 million or 11.3% from the same period in 2013. At September 30, 2014, nearly all of our total backlog is for work we perform under several long-term contracts obtained by the company since 2008. Our five largest aircraft platforms representing close to 80% of our total backlog are the E-2D, the Honda Jet, the Black Hawk, the Phenom 300, and the Gulfstream G650. Total backlog as of September 30, 2014 was $372.8 million with 43% for commercial products. Funded backlog increased to a record level of $141.4 million, which was $30 million higher than the funded backlog at 2013 year-end. This amount includes $63.6 million in funded backlog related to the multi-year contract we received from Northrop Grumman for Outer Wing Panel kits. This new contract is particularly important to us as we are operating in a narrow of uncertain defense spending, thus we expect this new award to anchor our defense business for years to come. An unfunded backlog…

Certainly. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions) Our first question is from Mark Jordan of Noble Financial. Please go ahead. Mark C. Jordan – Noble Financial Group, Inc: Good morning, gentlemen. Question on your guidance for revenues in the range for 2015, while you added back the A-10 revenues which I think you stated previously for ’15 would be – should have been less than 3 million. You increased that range 5 million at the high end. Is that a function of the potential for initial revenues of new business, and if that were to occur, would that new business therefore have startup costs that would be on an incremental basis depressing the gross margin for a period?

No, the change in the guidance range is just a function of trying to play out when exactly the program is going to cancel. If it cancels in June, it will get different results than if it cancels in September. So all we’re really doing would be giving you a larger range so that you can anticipate a higher revenue but the margin percentage will decline in line with whatever the revenue dollars increase so that the gross margin dollars come out to be the same that might have been a little bit circular.

So Mark, if you go back to the earlier, if you recall the earlier guidance of previous statements about $3 million that was before we had to basically reverse the revenue from the prior years. There is more revenue remaining on that contract now because of the way it was accounted for in the second quarter. Mark C. Jordan – Noble Financial Group, Inc. : Okay. You mentioned that you had 20% of your bids outstanding were for U.S. government prime, is – what is that mix of bids? Or is the 85 pods business coming back? Could you say where those bids are targeted?

I think you meant the C-5, Mark? Mark C. Jordan – Noble Financial Group, Inc. : Yes, excuse me, C-5.

We’re seeing a couple of major opportunities as a prime contractor. These are for what I’ll describe as a new way of that the government and particularly the depots are doing business. These are very similar contracts to our E-2D Outer Wing Panel kits programs where we would actually the potential winner or the winner would actually be like a, I’ll say, logistic supply chain, a value-added supply chain manager for the government on some of these aircraft. One aircraft is the T-38 and the other aircraft is the F-16. So these are major programs, the outcome of which is certainly uncertain but it’s expected to be probably in the next, say, 90 days for these two big opportunities. We are still seeing a little bit of C-5 activity, not a lot of kind of in an ironic way, we’re seeing some opportunities on A-10 spares, now which kind of brings you to the point of why we are getting A-10 spares when the wing – when we’re predicting the wing program will end. There is a distinction to be made between keeping the aircraft flying for a period of some time as we transition to the F-35 or other platforms that can do the close air support role and our wing replacement program which is essentially to provide a new wing for the structure that will keep this aircraft flying through 2030 and beyond. So we are seeing and we’ve actually did some bid some multimillion dollar bids to Boeing for spares on this A-10 that are related to the A-10. So that is also part of the mix. Mark C. Jordan – Noble Financial Group, Inc. : Okay. Final question from me, you alluded to the fact that you’re bidding on 787 business, you just say in your model you have less than 1% revenue assumed on why body large commercial aircraft, while – if you are successful in fiscal ‘16 or ‘17, what revenue level could that platform represent?

That’s really hard to say Mark. It’s not – because it’s a multitude of different bids for that particular aircraft and I assume you are limiting the question to the 87. Mark C. Jordan – Noble Financial Group, Inc. : Right, or I guess, probably that class of aircraft of large wide body commercial?

There are – without being kind of cute, there are really no small contract awards on those airplanes. Even if we were to win a – I’ll describe as a smaller assembly of the type that we’re bidding, you are looking at $4 million $5 million a year. If we win more complex, you are talking $10 million to $12 million a year. These are the opportunities that we’re going for with these, I describe as a super Tier-1. There are significant opportunities relative to our size for sure. Mark C. Jordan – Noble Financial Group, Inc. : Okay. Thank you very much.

Thank you. The next question is from Michael Crawford of B. Riley & Co. Please go ahead. Michael Crawford- B. Riley & Co.: Thank you. Continuing with the large commercial aircraft, why do you think the best entry is through Airbus or Boeing and not Embraer?

The Embraer right now, most of the structure, particularly on their new E-2 next-generation have already been awarded to the lights of Triumph Group and others. The trend these days and I think it will happen over the next three to five years is that the amount of risk sharing, the complexity of the structure, the magnitude of the work scope is really going to favor the multibillion dollar companies like Triumph, Spirit and others in Europe and Asia. So the types of opportunities that we feel that we’re going to be best-suited for both from a management standpoint and a risk management standpoint and capacity and space is the – through the Tier-1s and as I just alluded to with Mark, these are not insubstantial efforts for CPI and I think they will provide meaningful growth well into the future as a result with a, I will say, a lower risk than going directly as a Tier-1 to some of the bigger companies like Boeing and Airbus. Michael Crawford- B. Riley & Co.: Okay, thanks, Doug. And then just on the capital improvement front, you were talking about these new drilling and riveting machine, your CapEx, your annual CapEx is I believe will remain some $1 million but what would be potential labor savings if this capability achieves, what you think you can do where you reference that’s now reflected in the guidance from 2015 or?

Correct. Michael Crawford- B. Riley & Co.: Yeah.

I will give you a quick one. We plan to do a – there will be a presentation on our technology investments at the Investor Day on the 24th. But the – to give you an example, there is a – and again it depends on the assembly being made, but in one particular example where we ran a scenario on our Embraer program for certain sub-assemblies within our Embraer inlet, we are seeing time reductions properly around the 50% to 60% reduction in direct touch labor times. So we’ve modeled this one piece of equipment at under an 18-month payback based on labor savings. So it’s quite a significant improvement over the current manufacturing process. Michael Crawford- B. Riley & Co.: Okay.

And as a preview for the November 24th,, we’re looking in addition to the drilling and riveting, we are looking at all of our high, I will say, our high labor content processes particularly painting, finishing and we do a fair amount of polishing as well and we’re looking at robotic features and automated technologies for those as well. The idea is we’ve had a direct coupling between workforce, headcount and even facility square footage with our revenue growth. The idea in the future is to decouple that so our revenue can grow and our body count and our fixed costs can stay lower. So that’s kind of the message and you’ll hear more about that on the 24th. Michael Crawford- B. Riley & Co.: Okay, thank you. And then as the A-10 program when it ends whether it’s June or September, are you already able to start transitioning some of that floor space to other programs, or is that have to occur, is it like more of a hard stop and as much.

Some other things that we’re bidding on have an award cycle that would allow us to transition those new awards into that space. That’s a fancy way I guess of saying. If we win some other things that we’re bidding on over the next 90 days that should be a fairly smooth transition and some of these programs will occupy the same if not more floor space that the A-10 does presently. But if that were not the case, if we see delays and award for a loss of these bid opportunities then they would actually be some open floor space for a period of time, which would probably affect 2016 not ’15. Michael Crawford- B. Riley & Co.: Okay, thank you. And then last question, relates to adding capacity, in the past you’ve alluded to the fact that there might be some kind of tuck-ins available that might give you a new capability or more space or equipment to have faster more growth and the ability to service more platforms, is that something where right way to see in the coming year or is that moved further back on any…

I think the near term focus on our investment activity is certainly to allow internal growth and to allow our cost structure to be at the right level where we can win these larger commercial opportunities. That said, we plan over the – and again we’ll be outlined at the Investor Day. As we plan to move aggressively to growth the top-line and bottom-line and improve the cash flow of the company by every means available. And our investment in capital, equipment and machinery is just one prong of that. So we’re open to grow this business, we understand that there is a competitive market for shareholders as well as for customers and we intend to make the right investments to make sure that we’re doing better than the average aerospace company out there. Michael Crawford- B. Riley & Co.: Okay, thank you. And just a final question maybe for Vince, so this $15 million in recovery of previously paid taxes that just would show up below the operating line on the GAAP income statement?

It’s actually – the credit to the income statement was actually booked in the second quarter of this year, that was there was a credit in the second quarter income statement in the tax line, it’s actually sitting now as receivable in the balance sheet, the recoverable and differed income taxes, which is a combination of the carry back claim which is recoverable and the carry-forward which is the differed going forward. So it’s already sitting in the balance sheet. Michael Crawford- B. Riley & Co.: Okay, I got it. Okay, thank you.

Okay.

Thank you, Mike.

Thank you. The next question is from Michael Porter of (indiscernible) Capital Group. Please go ahead.

Hi Guys.

Hi Mike.

How are you doing? Just a couple of quick questions. Vince, what was the EBITDA for the quarter for 2014 and for the third quarter of 2013, adjusted EBITDA?

For the quarter, the EBITDA was about 3.2 million.

3.2 million?

Yeah, for 2013 and was 3.3 million a year before.

Okay, and that’s on an adjusted basis adding back stock options?

Correct.

Okay and what’s the EBITDA guidance for 2015?

Specific number as of yet – the range the last quarter have higher than whatever the adjusted EBITDA is for this quarter have to start for this year. So we haven’t come to end of the year yet, but in the lower 11 million of range.

So, 11 million plus for adjusted EBITDA for 2015.

’14.

’14, I am sorry.

20% to 25%.

Okay. Doug, can you walk us through perhaps some of the open how our pipeline currently looks and perhaps some of the open bids that are outstanding that and may be able to move the needle for the company further and add to what has been so far very strong award year?

See the nation awards are with the business opportunities that I would like not to identify. These are significantly Tier-1 level work statement for I’ll say make – what I’d describe is major pieces of aircraft structure. These are not like door to door or even in flight control services these are major pieces of structure. So we have large potential awards being bid to some significant business jet platforms. On the Tier-2 front the things I described to Mike on the line were – has some 787, I’ll say smaller assemblies that would be components of the – we also have some wing components that would be for some of the newer – the newer in service commercial aircraft now. And that kind of the summaries, there’s – I think our business now is being characterized by fewer large programs as opposed to many small programs, which you might be more familiar with Mike from being a long-term owner. So particularly in the commercial, it’s not like we have 50 bids that add up to a lot of money, we have under a dozen that we’re really concentrating on. On the defense side, it’s kind of a different story in addition to the two – the F-16 application and the T-38 application, we have characterized it for a million dollars and under back in the day. But we’re very excited about some of these larger contracts again and to get us back in that bid hasn’t been the case the five top program. On the Aero side, we see some opportunities, we have a bid opportunities with Sikorsky and with others, do more of the MRO type work that has been very success for us on the current Black Hawk and finally that probably more exciting is not commercial expense. And what I mentioned in my remarks, we’ve built this company away from, I’ll say, the me-too aerostructures company and our pod business, people come and see that pod business, it’s almost an OEM level of skill in terms of this complex integration mechanical and electrical. So we’re excited about our opportunities and we have many, many bid opportunities on the ISR balance pod market, which is really a growing market within the landscape. So that’s the kind of the color that I can provide.

So many bids outstanding for additional pod programs?

Yes. With current and new suppliers and new customers.

Okay, thanks, guys. I guess I’ll get back into the queue.

Thank you, Mike.

Thank you. (Operator Instructions) The next question is from Mark Jordan of Noble Financial. Please go ahead. Mark C. Jordan – Noble Financial Group, Inc.: Thank you. Follow-up with relative to, you mentioned some of the bids you had outstanding that you could hear about literally in the coming months bidding, I guess, the prime bids supporting and A-10 replacement parts. Of the bid you gave today are you including any unawarded new programs in those expectations?

I don’t want to answer incorrectly. You garbled a little bit near the end. The 2015, are you saying that we need to win some of these contracts for 2015? Mark C. Jordan – Noble Financial Group, Inc.: Is there anything included in your current revenue estimate range for 2015 from these potential unawarded new business bids?

What we do is we have a probability factor that goes in to our estimate, but I can tell you that about 85% - 85% to a little over 85% of our 2015 top line guidance comes from the long-term contracts that we currently have and have a high expectation of follow-on business that will generate that revenue. The balance will come from new wins and if some of the higher dollar wins that we carry at a, I’ll say, a lower probability happen, that’s where the upside comes from but we certainly can’t – we can’t predict that. And the way we’ve been here over the last couple of months is where we’re really cautious about raising guidance until we have some real firm indication that these things are going to happen. So – but yeah, there is a certain amount of new business for next year, not a lot, certainly not by historic standards, it is that 15% a lot and so hopefully, we have good news at the end of the year, so the year ends and we can take 2015 at that time. Mark C. Jordan – Noble Financial Group, Inc.: Final question from me, the A-10 program at this time was very significant user of incremental capital. If you are to win some of these larger commercial jet operations, would there be a significant working capital, incremental working capital need if you are successful of winning those structures?

I would say yes. These are – some of these efforts are – I said major structures of business aircraft in one case, yes, they would require some working capital, even the supplemental work would require some investments in inventory and other items that would use cash during 2015 to generate good revenue streams in 2016 and the five years after. Mark C. Jordan – Noble Financial Group, Inc.: Thank you.

Thank you. (Operator Instructions) And it appears we have no further questions at this time. I would like to turn the floor back over to management for any closing remarks.

Well, thank you. I’d like to thank all of you for participating in the call. Hopefully, we’ll see many of you at our November 24th Investor Day and again in early March when we announce our 2014 full-year results. Thank you.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation.