SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORTPursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934Date of earliest event reported: April 16, 2003
LMI AEROSPACE, INC. (Exact Name of Registrant as Specified in Its Charter)Missouri (State or Other Jurisdiction of Incorporation)
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0-24293 (Commission File Number) | 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 (Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events On April 16, 2003, LMI Aerospace, Inc. issued a press release relating to its financial performance during the Fourth Quarter and the year ended December 31, 2002. The text of the announcement is attached hereto as Exhibit 99.1. |
| Exhibit Number | Description |
| 99.1 | Text of Press Release, dated April 16, 2003, issued by LMI Aerospace, Inc. |
SIGNATURE Pursuant 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. Date: April 16, 2003 |
| By: /s/ Lawrence E. Dickinson Lawrence E. Dickinson Chief Financial Officer and Secretary |
| Exhibit Number | Description |
| 99.1 | Text of Press Release, dated April 16, 2003, issued by LMI Aerospace, Inc. |
Exhibit 99.1LMI Aerospace, Inc. Post Office Box 900 St. Charles, Missouri 63302For more information Contact Ed Dickinson, 636/916-2150FOR IMMEDIATE RELEASELMI AEROSPACE REPORTS RESULTS FOR FOURTH QUARTER AND FULL-YEAR 2002Goodwill impairment charges and excess costs on new programs affect results St. Louis, April 16, 2003 – LMI Aerospace, Inc. (Nasdaq: LMIA) announced today that sales in the fourth quarter of 2002 were $21.9 million, an increase of 36 percent over the same quarter in 2001. For the quarter ended December 31, 2002, LMI reported a net loss of ($7.7) million for the quarter or ($0.94) per diluted share, compared to net income of $111,000 or $0.01 per diluted share in the quarter ended December 31, 2001. The Company’s performance for the fourth quarter was negatively impacted by start-up costs related to certain new supply agreements received in 2002 that exceeded the market value of the product in process. The Company has begun negotiations with its customer related to some of these costs but the outcome is uncertain, so no benefit was recorded in 2002. This quarter’s results also include a non-cash charge of $5.1 million for the impairment of goodwill pursuant to Statement of Financial Accounting Standards (SFAS) No. 142,Goodwill and Other Intangibles. “Our sales gain for the quarter was attributable to our acquisitions in 2002 of Versaform Corporation, which added $3.7 million in sales for the quarter, and Southern Stretch Forming, which added $1.1 million in sales for the quarter, and sales gains at our Tempco subsidiary where sales increased by $1.5 million over the fourth quarter of 2001,” said Ronald Saks, president and CEO of LMI Aerospace. LMI reported net sales of $81.3 million for the year ended December 31, 2002, up 14.9 percent from the year ended December 31, 2001. The sales increase was due mainly to the acquisition of Versaform Corporation in 2002 and growth at Tempco Engineering, acquired in 2001. Excluding the acquisitions of 2001 and 2002, sales in 2002 declined 17.2 percent to $50.1 million from $60.5 million in 2001, primarily due to the decline in sales to Boeing. LMI reported a net loss in 2002 of ($8.3) million or ($1.03) per diluted share in 2002, compared to net income of $3.0 million in 2001. In addition to the previously discussed goodwill impairment charge and start up costs, the Company incurred a non-cash charge for goodwill impairment in the first quarter of 2002 of $1.1 million for the adoption of SFAS No. 142 related to the acquisitions of Precise Machine in 1998 and U.S. Hayakawa in 1999. Gross profit for the fourth quarter of 2002 was $700,000 or 3.3 percent of sales, a decrease from $3.5 million and 21.8 percent in the fourth quarter of 2001. The decrease in gross margin resulted primarily from excess costs incurred on two new programs totaling approximately $3.5 million in the quarter. Selling, general, and administrative expenses in the quarter were approximately $1.1 million more than the prior year due primarily to the addition of Versaform. As a percentage of sales, SG&A was 16.9 percent in the quarter, up slightly from 16.1 percent in the year-ago quarter. Other Expense in the fourth quarter included a $400,000 charge for a decline in market value of certain available-for-sale securities, which are still owned by the Company. The full year 2002 charge for this decline in market value was $600,000. The losses incurred by the Company combined with increases in accounts receivable and inventories caused the Company to borrow $4.4 million on its revolving line of credit. Additionally, the net losses created violations of certain financial covenants with its primary lending institution. The Company obtained a waiver of these violations and negotiated an increase in its revolving line of credit of up to $10.0 million, subject to a borrowing base calculation, and new covenants that better reflect the current outlook for the Company. The Company feels that this financing arrangement is sufficient to support its operations through 2003. The Company also has retained a consultant to assist in reviewing operational performance, primarily in the St. Charles facility, which has been largely responsible for the operating losses for the year. Backlog at December 31, 2002, was approximately $72.1 million, up from $58.7 million at the end of the fourth quarter 2001. “Several major commercial aerospace customers have adjusted delivery schedules and reduced production rates due to an uncertain economy, international conflict, and a number of airlines operating under protection of bankruptcy laws,” said Saks. “While the Company expects commercial production rates to remain flat for the foreseeable future, it has seen accelerated schedules for transport and military jet customers. In addition, the Company has agreed to a three year extension of an existing contract having an estimated sales volume of $45 million at projected production rates.” The new programs that negatively impacted the fourth quarter continue to be detrimental to the Company’s performance. Negotiations related to this program involve the Company’s request for a lump sum settlement of costs incurred and re-pricing of certain components beginning January 1, 2003. Resolution of this negotiation could have a material impact upon the 2003 operating results. Additional information will be provided upon conclusion of these negotiations or release of the Company’s first quarter results. LMI Aerospace, Inc. is a leading supplier of quality components to the aerospace and technology industries. The Company operates twelve manufacturing facilities that fabricate, machine, finish and integrate formed, close tolerance aluminum and specialty alloy components for commercial, corporate, regional and military aircraft, laser equipment used in the semiconductor and medical industries, and for the commercial sheet metal industries. This press release includes forward-looking statements related to LMI Aerospace’s outlook for 2003, which are based on current management expectations. Such forward-looking statements are subject to various risks and uncertainties, many of which are beyond the control of LMI Aerospace, Inc. Actual results could differ materially from the forward-looking statements as a result, among other things, of the factors detailed from time to time in LMI Aerospace’s filings with the Securities and Exchange Commission. tables follow . . . |
LMI Aerospace, Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
2002 2001 2002 2001
Net sales $21,828 $16,112 $81,349 $70,823
Cost of sales 21,099 12,599 69,185 54,809
Gross profit 729 3,513 12,164 16,014
------- ------- ------- -------
Selling, general,
and administrative
expenses 3,689 2,587 12,931 10,194
Goodwill impairment
charges 5,104 - 5,104 -
------- ------- ------- -------
Income (loss) from
operations (8,064) 926 (5,871) 5,820
Interest expense (477) (284) (1,495) (843)
Other (expense) income,
net (325) (304) (525) (247)
------- ------- ------- -------
Income (loss) before income
taxes (8,866) 338 (7,891) 4,730
Provision for (benefit
of) income taxes (1,160) 227 (691) 1,764
------- ------- ------- -------
Income (loss) before
cumulative change in
accounting principle (7,706) 111 $(7,200) $ 2,966
Cumulative effect of
change in accounting
principle, net of
income tax benefit of
$663 for 2002 - - (1,104) -
------- ------- ------- -------
Net income (loss) $(7,706) 111 $(8,304) $ 2,966
======= ======= ======= =======
Amounts per common
share:
Income (loss) before
cumulative effect of
change in accounting
principle $(0.94) $ 0.01 $(0.89) $ 0.37
Cumulative effect of
change in accounting
principle - - (0.14) -
------- ------- ------- -------
Net income (loss)
per common share $(0.94) $ 0.01 $(1.03) $ 0.37
Net income (loss)
per common share -
assuming dilution $(0.94) $ 0.01 $(1.03) $ 0.36
Weighted average common
shares outstanding 8,181,786 8,023,998 8,077,293 8,059,682
--------- --------- --------- ---------
Weighted average
dilutive stock
options outstanding - 119,492 - 98,444
========= ========= ======== =========
LMI Aerospace, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
December 31
2002 2001
-----------------------------------
Assets
Current assets:
Cash and cash equivalents $ 1,182 $ 4,645
Investments - 643
Trade accounts receivable, net
of allowance of $64 in 2001
and $334 in 2002 11,392 6,285
Inventories 25,181 23,045
Prepaid expenses 978 787
Deferred income taxes 1,389 886
Income taxes receivable 1,501 -
-----------------------------------
Total current assets 41,623 36,291
Property, plant, and equipment, net 25,986 24,014
Goodwill 5,653 7,420
Customer intangible assets, net 4,267 -
Other assets 336 277
-----------------------------------
$ 77,865 $ 68,002
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,107 $ 3,547
Accrued expenses 2,846 2,659
Current installments of long-term
debt and capital lease 4,616 2,334
obligations
-----------------------------------
Total current liabilities 13,569 8,540
Long-term debt and capital lease
obligations, less current
installments 24,621 12,621
Deferred income taxes 1,939 1,192
-----------------------------------
Total long-term liabilities 16,560 13,813
Stockholders' equity:
Common stock of $.02 par value;
authorized 28,000,000
shares; 8,734,422 and 8,736,427
shares issued in
2001 and 2002, respectively 175 175
Preferred stock; authorized
2,000,000 shares; none issued - -
Additional paid-in capital 26,171 26,171
Treasury stock, at cost, 716,676 and
554,641 shares in 2001
and 2002, respectively (2,632) (3,402)
Accumulated other comprehensive loss (17) -
Retained earnings 14,039 22,705
-----------------------------------
Total stockholders' equity 37,736 45,649
-----------------------------------
$ 77,865 68,002
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