SECURITIES AND EXCHANGE COMMISSION |
|X| | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 2001. |
|_| | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to . |
Commission file number: 0-24293 LMI AEROSPACE, INC. |
Missouri (State or Other Jurisdiction of Incorporation or Organization) | 43-1309065 (I.R.S. Employer Identification No.) |
3600 Mueller Road St. Charles, Missouri (Address of Principal Executive Offices) | 63301 (ZIP Code) |
(636) 946-6525 |
Title of class of Common Stock | Number of Shares outstanding as of Septembr 30, 2001 |
Common Stock, par value $.02 per share | 8,022,846 |
LMI AEROSPACE, INC.QUARTERLY REPORT ON FORM 10-Q |
PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS (UNAUDITED) Condensed Consolidated Balance Sheets as of December 31, 2000 and September 30, 2001 Condensed Consolidated Statements of Operations for the three months and the nine months ended September 30, 2000 and 2001 Condensed Consolidated Statements of Cash Flows for the the nine months ended September 30, 2000 and 2001 Notes to Unaudited Condensed Consolidated Financial Statements Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION PART II. OTHER INFORMATION Item 5. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURE PAGE EXHIBIT INDEX
LMI Aerospace, Inc. |
December 31, September 30, 2000 2001 (unaudited) ------------------------------- Assets Current assets: Cash and cash equivalents $ 1,676 $ 2,662 Investments 536 463 Trade accounts receivable, net 6,627 9,496 Inventories 15,909 20,736 Prepaid expenses 361 1,205 Income taxes receivable 498 194 Deferred income taxes 782 782 ------------------------------- Total current assets 26,389 35,538 Property, plant, and equipment, net 21,059 24,440 Other assets 345 300 Goodwill, net 1,888 7,648 ------------------------------- $ 49,681 $ 67,926 =============================== Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,570 $ 3,759 Accrued expenses 1,962 2,798 Current installments of long-term debt 104 2,248 ------------------------------- Total current liabilities 5,636 8,805 Long-term debt, less current installments 121 12,664 Deferred income taxes 1,245 1,219 ------------------------------- Total noncurrent liabilities 1,366 13,883 Stockholders' equity: Common stock of $.02 par value; authorized 28,000,000 shares; issued 8,734,422 and 8,736,427 at December 31, 2000 and at September 30, 2001, respectively 175 175 Additional paid-in capital 26,165 26,171 Treasury Stock, at cost, 628,604 and 711,576 shares at December 31, 2000 and September 30, 2001, respectively (3,174) (3,383) Accumulated other comprehensive loss (272) (319) Retained earnings 19,785 22,594 ------------------------------- Total stockholders' equity 42,679 45,238 ------------------------------- $ 49,681 $ 67,926 =============================== See accompanying notes.
LMI Aerospace, Inc. |
For the Three Months For the Nine Months Ended September 30 Ended September 30 ------------------------------------------------------- 2000 2001 2000 2001 ------------------------------------------------------- Net sales $ 12,835 $ 19,558 $ 41,131 $ 54,712 Cost of sales 12,096 14,936 36,302 42,210 ------------------------------------------------------- Gross profit 739 4,622 4,829 12,502 Selling, general, and administrative expenses 2,249 2,800 6,953 7,607 ------------------------------------------------------- Income (loss) from operations (1,510) 1,822 (2,124) 4,895 Interest income (expense) 5 (237) 2 (503) ------------------------------------------------------- Income (loss) before income taxes (1,505) 1,585 (2,122) 4,392 Provision for (benefit from) income taxes (527) 555 (743) 1,537 ------------------------------------------------------- Income (loss) before cumulative effect of change in accounting principle (978) 1,030 (1,379) 2,855 ======================================================= Cumulative effect of change in accounting principle net of income tax benefit of $88 - - (164) - ======================================================= Net income (loss) $ (978) $ 1,030 $ (1,543) $ 2,855 ======================================================= Amounts per common share: Income (loss) before cumulative effect of change in accounting principle $ (0.12) $ 0.13 $ (0.17) $ 0.35 Cumulative effect of change in accounting principle - - $ (0.02) - ------------------------------------------------------- Net income (loss) per common share $ (0.12) $ 0.13 $ (0.19) $ 0.35 ======================================================= Net income (loss) per common share - assuming dilution $ (0.12) $ 0.13 $ (0.19) $ 0.35 ======================================================= Weighted average common shares outstanding 8,216,070 8,063,505 8,209,433 8,071,494 ======================================================= Weighted average dilutive stock options outstanding 0 142,156 3,306 88,714 ======================================================= See accompanying notes.
LMI Aerospace, Inc. |
For the Nine Months Ended September 30 2000 2001 ------------------------------ Operating activities Net income (loss) $ (1,543) $ 2,855 Adjustments to reconcile net income (loss) to net cash generated from operating activities: Depreciation and amortization 2,717 3,085 Changes in operating assets and liabilities: Trade accounts receivable 182 (401 Inventories (530) (979 Prepaid expenses and other assets (105) (811 Income taxes payable (31) 455 Accounts payable (1,174) (400 Accrued expenses 587 674 ------------------------------- Net cash generated from operating activities 103 4,478 Investing activities Additions to property, plant, and equipment, net (1,395) (2,423 Proceeds from sale of property, plant and equipment - 90 Purchases of investments (954) - Acquisition of company, net of cash acquired - (14,926 ------------------------------ Net cash used by investing activities (2,349) (17,259 Financing activities Proceeds from issuance of long-term debt - 14,250 Principal payments on long-term debt (76) (129 Treasury stock transactions, net (213) (354 ------------------------------ Net cash (used by) generated from financing activities (289) 13,767 Net change in cash and cash equivalents (2,535) 986 Cash and cash equivalents, beginning of period 5,908 1,676 ------------------------------ Cash and cash equivalents, end of period $ 3,373 $ 2,662 ============================== Supplemental Schedule of noncash investing and financing activities: A capital lease obligation of $151 was incurred on March 22, 2001, when the Company entered into a lease for equipment. A note payable obligation of $398 was incurred on June 1, 2001, when the Company entered into a purchase agreement for equipment.
LMI Aerospace, Inc. |
For the Three Months For the Nine Months Ended September 30 Ended September 30 ------------------------------------------------------- As Previously As Previously Reported As Restated Reported As Restated ------------------------------------------------------- Net sales $ 12,911 $ 12,835 $ 41,407 $ 41,131 Gross Profit 707 739 4,756 4,829 Net Loss (998) (978) (1,427) (1,543) Amounts per common share: Net Loss (0.12) (0.12) (0.17) (0.19) Net Loss - assuming dilution (0.12) (0.12) (0.17) (0.19)
2. AcquisitionsOn April 1, 2001, the Company acquired certain assets and liabilities of Tempco Engineering, Inc. and Hyco Precision, Inc. (together referred to as “Tempco”), two related companies in Sun Valley, California, for $14,250, subject to certain purchase price adjustments, as defined. In addition, the Company may pay additional contingent consideration of up to $1,250 if Tempco’s EBITDA exceeds certain limits at the end of each quarter beginning June 30, 2001 and ending March 31, 2003. Based on the results of Tempco at September 30, 2001, no additional consideration was due. This acquisition was accounted for under the purchase method of accounting and, accordingly, the results of operations of Tempco have been included in the consolidated financial statements of the Company after April 1, 2001. The cost to acquire Tempco has been preliminarily allocated to the assets acquired and liabilities assumed according to their estimated fair values at the time of the acquisition and are subject to adjustment when additional information concerning asset and liability valuations and certain other purchase price adjustments are finalized. The preliminary allocation has resulted in acquired goodwill of approximately $ 6,056, which is being amortized on a straight-line basis over 15 years. 3. FASB 141 & 142 DisclosureIn June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141,Business Combinations,and No. 142,Goodwill and Other Intangible Assets,effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill (and intangible assets deemed to have indefinite lives) will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of 2002. Application of the non-amortization provisions of the Statement is expected to result in an increase in net income after tax of $341 ($.04 per share and $.04 per share assuming dilution) per year. During 2002, the Company will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of January 1, 2002 and has not yet determined what the effect of these tests will be on the earnings and financial position of the Company. 4. InventoriesInventories consist of the following: |
December 31, September 30, 2000 2001 -------------------------------------------- Raw materials $ 3,842 $ 3,766 Work in process 3,380 7,042 Finished goods 8,687 9,928 -------------------------------------------- $ 15,909 $ 20,736 ============================================
5. Long-Term DebtLong-term debt consists of the following: |
December 31, September 30, 2000 2001 -------------------------------------- Term loan $ - $ 14,250 Notes payable, principal and interest payable monthly, at fixed rates, ranging from 4.98% to 9.00% 225 536 Capital lease obligations - 126 -------------------------------------- 225 14,912 Less current installments 104 2,248 -------------------------------------- $121 $12,664 ======================================
In order to facilitate the acquisition of Tempco, the Company amended its current loan agreement with Union Planters entering into a three-year Borrowing Agreement (“Borrowing Agreement”) on April 1, 2001. This Borrowing Agreement provides financing up to $15,500 and bears interest at ninety day LIBOR plus 3%, subject to a cap of 8.5% and a floor of 7.0%. The interest rate was 7.0% at September 30, 2001. The Company drew $14,250 on this Borrowing Agreement on April 1, 2001. Interest payments are due monthly. Principal is due monthly beginning in October, 2001, using a seven year amortization. The Borrowing Agreement is secured by all assets of the Company, excluding real property, and contains financial covenants requiring minimum levels of cash flow coverage, EBITDA, and tangible net worth. Under the Borrowing Agreement, the Company has $1,250 available to fund any additional contingent consideration. Additionally, the Company has a Revolving Credit Agreement (“Revolving Credit Agreement”) for up to $7,000 which expires November 30, 2001. The Company is currently in negotiations with its lender to extend the Revolving Credit Agreement for a minimum of one additional year. No amounts were owed on the Revolving Credit Agreement at September 30, 2001. Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL |
(a) | Exhibit No. | Description |
10.1 | Leonard's Metal Inc./ Lockheed Martin Aeronautics Company Business Reformation Agreement |
10.2 | Sixth Amendment to Loan Agreement |
(b) | The Company filed the following Reports on Form 8-K: |
(i) | On August 7, 2001, the Company filed a Report on Form 8-K relating to the issuance of a press release announcing second quarter earnings; |
(ii) | On August 8, 2001, the Company filed a Report on Form 8-K disclosing certain events relating to a union organizing campaign; |
(iii) | On August 9, 2001, the Company filed a report on Form 8-K relating to the issuance of a press release announcing revised earnings estimates; |
(iv) | On September 13, 2001, the Company filed a Report on Form 8-K announcing an employee vote relating to a union organizing campaign; and |
(v) | On September 26, 2001, the Company filed a Report on Form 8-K announcing the certification of an employee vote relating to a union organizing campaign. |
SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. |
LMI AEROSPACE, INC. |
Date: November 13, 2001 | By: /s/ Lawrence E. Dickinson Lawrence E. Dickinson Chief Financial Officer and Secretary |
EXHIBIT INDEX |
Exhibit Number | Description |
10.1 | Leonard's Metal Inc./ Lockheed Martin Aeronautics Company Business Reformation Agreement |
10.2 | Sixth Amendment to Loan Agreement |