Limco-Piedmont Inc.
LIMCO-PIEDMONT INC. REPORTS RESULTS
FOR THE THREE AND TWELVE ENDED DECEMBER 31, 2008
Tulsa, Oklahoma, March 8, 2009 -- Limco-Piedmont Inc. (Nasdaq: LIMC) today announced that revenues for the three months ended December 31, 2008 were $17.9 million, an increase of $3.0 million from $14.9 million for that same period last year. This increase is reflective of our continued growth in our MRO business segment. Revenues for the twelve months ended December 31, 2008 were $71.6 million, an increase of $1.8 million from $69.8 million for the same period last year. This increase in sales revenues is a result of the growth in our MRO revenues during the twelve months ended December 31, 2008.
Revenues from our two segments for the three and twelve-month periods ended December 31, 2008 and 2007 were as follows:
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | Revenues | | | % of Total Revenues | | | Revenues | | | % of Total Revenues | | | Revenues | | | % of Total Revenues | | | Revenues | | | % of Total Revenues | |
| | | (Revenues in thousands) | |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| MRO Services | | $ | 14,012 | | | | 78.1 | % | | $ | 11,515 | | | | 77.4 | % | | $ | 54,276 | | | | 75.8 | % | | $ | 49,392 | | | | 70.8 | % |
| Parts services | | | 3,929 | | | | 21.9 | % | | | 3,362 | | | | 22.6 | % | | | 17,289 | | | | 24.2 | % | | | 20,384 | | | | 29.2 | % |
| Total revenues | | $ | 17,941 | | | | 100.0 | % | | $ | 14,877 | | | | 100.0 | % | | $ | 71,565 | | | | 100.0 | % | | $ | 69,776 | | | | 100.0 | % |
Our operating income decreased by $373,000 to $465,000 for the three months ended December 31, 2008 from $838,000 for the three months ended December 31, 2007. Our operating income decreased by $4.1 million, to $3.8 million for the twelve months ended December 31, 2008 from $7.9 million for the twelve months ended December 31, 2007.
General and administrative expenses increased by $79,000 to $1.7 million for the three months ended December 31, 2008 from $1.6 million for the three months ended December 31, 2007. The increase in general and administrative expenses is primarily attributable to audit expenses and some merger and acquisition expenses. Non-cash compensation expense was ($27,000) and included in general and administrative expenses during the fourth quarter of 2008 compared to $220,000 in the fourth quarter of 2007.
General and administrative expenses increased by $137,000 to $7.1 million for the year ended December 31, 2008 from $7.0 million for the year ended December 31, 2007. The increase in general and administrative expenses is primarily attributable to approximately $837,000 in one-time SOX and public company costs, $110,000 in severance pay, $60,000 in tax audit expenses, and acquisition expenses of $357,000. These expenses were offset by the lack of phantom stock expense of $325,000, IPO bonus expense of $400,000 and increased public company costs and administrative costs during the year ended December 31, 2007. Non-cash compensation expense was $175,000 and included in general and administrative expenses during the year ended December 31, of 2008 compared to $390,000 in the during the year ended December 31, 2007.
Net income for the three month period ended December 31, 2008 was $145,000, or $0.01 per basic and diluted share compared with $789,000 or $0.06 per basic and diluted share in the period ended December 31, 2007.
Net income for the twelve month period ended December 31, 2008 was $2.7 million, or $0.21 per basic and diluted share compared with $5.2 million or $0.47 per basic and diluted share in the period ended December 31, 2007.
We ended the quarter with $21.3 million in cash and cash equivalents and $11.3 million in short-term investments.
Bob Koch and Udi Netivi our Co-Chief Executive Officers, commented: “Despite weakness in the airline segment and the general economy, the fourth quarter of 2008 saw continued revenue growth in our core MRO businesses and parts business versus the fourth quarter of last year. The revenue mix at our LIMCO Airepair subsidiary drove higher production costs and depressed gross margins. We expect these mix issues to correct favorably in 2009. Additionally, the expense reduction measures we took in the fourth quarter are taking effect.”
At Piedmont, our propeller and landing gear products are growing and offsetting revenue pressure we are seeing in the APU and parts segments. However, we received two new APU contracts with European Airlines, each for a period of five years.
At LIMCO, sales for the fourth quarter were up from the fourth quarter of 2007 but slightly off of the third quarter of 2008. Solid OEM and Military bookings for 2009 and beyond continued in the fourth quarter and airline receipts stabilized. The lean production and cost control measures we have implemented are taking effect and will drive improved 2009 performance. The consolidation in North Carolina will also drive continued performance improvements of the LIMCO products lines.
Dr. Shmuel Fledel, our Chairman of the Board, concluded by saying, “Despite challenging economic conditions, we expect revenue growth in 2009. The expense control measures we have taken and consolidation of the two operating entities in one location will contribute to improved earnings going forward. We are looking positively towards 2009.”
About Limco - Piedmont Inc.
Limco-Piedmont Inc. provides maintenance, repair and overhaul, or MRO, services and parts supply services to the aerospace industry. Limco-Piedmont’s four Federal Aviation Administration certified repair stations provide aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military. Limco-Piedmont specializes in MRO services for components of aircraft, such as heat transfer components, auxiliary power units, propellers, landing gear and pneumatic ducting. In conjunction with Limco-Piedmont’s MRO services, Limco-Piedmont is also an original equipment manufacturer of heat transfer equipment for airplane manufacturers and other related products. Limco-Piedmont’s parts services division offers inventory management and parts services for commercial, regional and charter airlines and business aircraft owners
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the airline industry, changes in demand for our services and products, the timing and amount or cancellation of orders, the price and continuity of supply of component parts used in our operations, and other risks detailed from time to time in Limco-Piedmont’s filings with the Securities Exchange Commission, including its Annual Report on Form 10-K. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.
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LIMCO-PIEDMONT INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| ASSETS | | | | | | |
| Current Assets: | | | | | | |
| Cash and cash equivalents | | $ | 21,336 | | | $ | 5,039 | |
| Marketable Securities | | | 11,300 | | | | 28,806 | |
| Accounts receivable (net of allowance for doubtful accounts of $79 and $140 at December 31, 2008 and, respectively) | | | 11,820 | | | | 9,328 | |
| Inventories | | | 18,978 | | | | 16,391 | |
| Other accounts receivable and prepaid expenses | | | 1,326 | | | | 1,481 | |
| | | | | | | | | |
| Total current assets | | | 64,760 | | | | 61,045 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 6,023 | | | | 5,169 | |
| Intangible assets, net | | | 1,383 | | | | 1,709 | |
| Goodwill | | | 4,780 | | | | 4,780 | |
| Total assets | | $ | 76,946 | | | $ | 72,703 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payables | | $ | 5,378 | | | $ | 5,084 | |
| Parent company payables | | | 2,341 | | | | 1,762 | |
| Other accounts payable and accrued expenses | | | 1,764 | | | | 1,568 | |
| Total current liabilities | | | 9,483 | | | | 8,414 | |
| | | | | | | | | |
| Long-Term Liabilities: | | | | | | | | |
| Deferred income tax liabilities | | | 835 | | | | 404 | |
| | | | | | | | | |
| Total liabilities | | | 10,318 | | | | 8,818 | |
| Commitments and contingencies | | | | | | | | |
| Shareholders' Equity: | | | | | | | | |
| Common stock, $0.01 par value; 25,000 shares | | | | | | | | |
| authorized, 13,205 shares issued and outstanding at both December 31, 2008 and 2007 | | | 132 | | | | 132 | |
| Additional paid-in capital | | | 49,179 | | | | 49,004 | |
| Retained earnings | | | 17,462 | | | | 14,749 | |
| Accumulated other comprehensive loss | | | (145 | ) | | | --- | |
| Total shareholders' equity | | | 66,628 | | | | 63,885 | |
| Total liabilities and shareholders' equity | | $ | 76,946 | | | $ | 72,703 | |
LIMCO-PIEDMONT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
| | | Three months ended | | | Twelve months ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Revenue | | | | | | | | | | | | |
| MRO services | | $ | 14,012 | | | $ | 11,515 | | | $ | 54,276 | | | $ | 49,392 | |
| Parts services | | | 3,929 | | | | 3,362 | | | | 17,289 | | | | 20,384 | |
| | | | | | | | | | | | | | | | | |
| Total revenue | | | 17,941 | | | | 14,877 | | | | 71,565 | | | | 69,776 | |
| | | | | | | | | | | | | | | | | |
| Cost and operating expenses | | | | | | | | | | | | | | | | |
| MRO services | | | 11,787 | | | | 8,986 | | | | 43,664 | | | | 35,205 | |
| Parts services | | | 3,352 | | | | 2,706 | | | | 13,922 | | | | 16,603 | |
| Selling and marketing | | | 614 | | | | 638 | | | | 2,755 | | | | 2,613 | |
| General and administrative | | | 1,669 | | | | 1,590 | | | | 7,118 | | | | 6,981 | |
| Amortization of intangibles | | | 54 | | | | 119 | | | | 326 | | | | 474 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 465 | | | | 838 | | | | 3,780 | | | | 7,900 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest income | | | 342 | | | | 355 | | | | 1,259 | | | | 897 | |
| Interest and other expense | | | (326 | ) | | | (13 | ) | | | (403 | ) | | | (732 | ) |
| | | | | | | | | | | | | | | | | |
| Total other income (expense) | | | 16 | | | | 342 | | | | 856 | | | | 165 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes | | | 481 | | | | 1,180 | | | | 4,636 | | | | 8,065 | |
| Provision for income taxes | | | 333 | | | | 391 | | | | 1,923 | | | | 2,871 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 148 | | | $ | 789 | | | $ | 2,713 | | | $ | 5,194 | |
| | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.01 | | | $ | 0.06 | | | $ | 0.21 | | | $ | 0.48 | |
| Diluted net income per share | | $ | 0.01 | | | $ | 0.06 | | | $ | 0.21 | | | $ | 0.47 | |
| | | | | | | | | | | | | | | | | |
| Basic shares outstanding | | | 13,205 | | | | 12,406 | | | | 13,205 | | | | 10,934 | |
| Diluted shares outstanding | | | 13,205 | | | | 12,437 | | | | 13,205 | | | | 10,962 | |
