UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 15, 2004
LMI AEROSPACE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Missouri 0-24293 43-1309065
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
3600 Mueller Road, St. Charles, Missouri 63302-0900
(Address of principal executive offices) (Zip Code)
(636) 946-6525
(Registrant's telephone number, including area code)
(Former Name or Former Address, If Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On November 15, 2004, LMI Aerospace, Inc. issued a press release announcing its
financial performance during the third quarter of 2004. The text of the press
release is attached hereto.
The information in this Current Report on Form 8-K, including the attached press
release, shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
SIGNATURES
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 hereunto duly authorized.
Date: November 15, 2004
LMI AEROSPACE, INC.
By: /s/ Lawrence E. Dickinson
---------------------------------------
Lawrence E. Dickinson
Chief Financial Officer and Secretary
Contact:
Ed Dickinson, Chief Financial Officer
636.916.2150
FOR IMMEDIATE RELEASE
LMI AEROSPACE REPORTS PROFITABLE THIRD QUARTER OF 2004
Revenue gains and cost reductions yield profitable operations
ST. LOUIS - November 12, 2004 - LMI Aerospace, Inc. (Nasdaq: LMIA),
announced today that it posted profits of $ 1.1 million in the third quarter of
2004 on a 31.1 percent increase in revenues.
For the quarter ended September 30, 2004, net sales were $23.0 million,
compared to $17.6 million for the quarter ended September 30, 2003. Net income
was $1.1 million, or $0.14 per diluted share, for the third quarter of 2004,
compared to a net loss of ($644,000) or ($0.08) per diluted share for the third
quarter of 2003. Included in this year's third quarter results were net gains on
asset sales of $440,000, special bank fees of $350,000 and restructuring costs
of $52,000. The Company's loss in the third quarter of 2003 included $441,000 of
restructuring expenses.
Sales for the Sheet Metal segment in the third quarter of 2004 were $19.4
million, an increase of 34.7 percent from $14.4 million in the third quarter of
2003. The increase was primarily due to higher sales of business jet components.
As previously reported, weakness in demand for business jets in 2003, reflected
by production stoppages by several LMI customers and their subsequent aggressive
inventory reduction strategies, significantly reduced business jet sales in 2003
and the first quarter of 2004. However, increasing production rates of business
jets commencing in the second quarter of 2004 as well as an award of significant
new work by Gulfstream to several LMI plants resulted in higher business jet
component sales in the third quarter of 2004.
For the Machining and Technology segment, net sales in the third quarter
of 2004 were $3.6 million, up from $3.1 million in the third quarter of 2003.
This increase was primarily attributable to growth in sales of military
components.
The combined backlog for both segments was $81 million at September 30,
2004, compared to $55 million at September 30, 2003.
Gross profit for the third quarter of 2004 was $4.8 million, or 20.7
percent of net sales, compared to $2.7 million, or 15.6 percent of net sales, in
the third quarter of 2003. Gross profit for the Sheet Metal segment increased
primarily because of revenue gains in key markets as well as cost reduction and
restructuring efforts at two of the company's facilities during the second half
of 2003 and the first half of 2004. Gross profit in the Machining and Technology
segment increased due to higher sales and a more favorable product mix.
Selling, general and administrative expenses for the third quarter of 2004
were $3.2 million, down from $3.4 million in third quarter of 2003. Included in
these amounts are restructuring costs of $52,000 in 2004 and $441,000 in 2003.
Excluding restructuring costs, budgeted cost reductions in the third quarter of
2004 were offset primarily by $200,000 of payroll and professional fee
increases.
Sales for the nine months ended September 30, 2004 were $63.4 million, up
10.8 percent from $57.3 million at September 30, 2003. For the first nine months
of 2004, LMI had a net loss of ($239,000), or ($0.03) per diluted share,
compared to a net loss of ($2.3 million), or ($0.29) per diluted share, in the
first nine months of 2003. This year's results include special bank fees of
$475,000, a $440,000 net gain on asset sales and restructuring costs of
$737,000. The prior year's results include $441,000 of restructuring expenses.
"Our operating results for the third quarter of 2004 were much improved
over those in the first half of 2004," said Ronald Saks, President and CEO of
LMI Aerospace. "Increasing revenue from the business jet and commercial airplane
markets and the decrease in legal, consulting, restructuring and moving costs
combined to give us consistent, monthly operating profits during our third
quarter."
"Demand in our military and technology sectors has not grown in recent
months and is not expected to contribute to the sales growth expected over the
remainder of this year," Saks added. "Our current forecast for 2004 is for sales
to be in the range of $84 million to $87 million and gross margins to be between
18 and 20 percent for the full year. Selling, general and administrative
expenses, before restructuring charges, are expected to be approximately $13
million for the year. Our forecast for 2005 is for sales of $95 million to $105
million, gross margins of 20 to 24 percent and selling, general and
administrative expense of $14 million."
Improvements in LMI's operating performance, the collection of a $500,000
tax refund and net proceeds of $700,000 from the sale of Versaform Canada
allowed the company to reduce its senior debt by $2.2 million in the third
quarter of 2004 to $22.5 million at September 30, 2004. LMI met its key
financial covenants under its lending agreement as of September 30, 2004. The
balance drawn against its $9.0 million revolving credit agreement was $7.9
million at November 9, 2004.
"We are pleased to announce a net profit for the second consecutive
quarter," Saks said. "Our markets seem to be improving, and recent gains in
market share give us confidence that our revenue gains and cost reductions will
combine to help us resume our growth and improve our operating results. We
continue to explore possible sales of certain assets in order to further reduce
debt levels. Additionally, LMI is committed to our strategy of improving our
supply chain and distribution management in order to provide unique services to
our customers."
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 2004, 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 filing with the Securities and Exchange Commission, including those
factors contained in the Company's Annual Report on Form 10-K/A for the year
ended December 31, 2003.
LMI AEROSPACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $ 23,032 $ 17,566 $ 63,447 $ 57,273
Cost of sales 18,272 14,823 51,689 49,882
----------- ----------- ----------- -----------
Gross profit 4,760 2,743 11,758 7,391
Selling, general and administrative expenses 3,140 2,938 9,762 9,497
Restructuring charges 52 441 737 441
----------- ----------- ----------- -----------
Income (loss) from operations 1,568 (636) 1,259 (2,547)
Other income (expense):
Interest expense (798) (407) (1,806) (1,234)
Other, net 414 6 422 35
----------- ----------- ----------- -----------
Income (loss) before income taxes 1,184 (1,037) (125) (3,746)
Provision for (benefit of) income taxes 39 (393) 114 (1,405)
----------- ----------- ----------- -----------
Net income (loss) $ 1,145 $ (644) $ (239) $ (2,341)
=========== =========== =========== ===========
Amounts per common share basic and dilutive:
Net income (loss) per common share $ 0.14 $ (0.08) $ (0.03) $ (0.29)
=========== =========== =========== ===========
Weighted average common shares outstanding 8,181,786 8,181,786 8,181,786 8,181,786
=========== =========== =========== ===========
LMI AEROSPACE REPORTS THIRD QUARTER 2004 RESULTS
PAGE 6
LMI AEROSPACE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
(Unaudited)
September 30, 2004 December 31, 2003
--------------- ---------------
Assets
Current assets:
Cash and cash equivalents $ 260 $ 441
Trade accounts receivable, net of allowance of $193 at
September 30, 2004 and $245 at December 31, 2003 10,964 9,158
Inventories 23,396 24,159
Prepaid expenses 1,190 787
Deferred income taxes 2,206 2,206
Income taxes receivable 226 1,933
--------------- ---------------
Total current assets 38,242 38,684
Property, plant and equipment, net 19,638 22,248
Goodwill 5,653 5,653
Customer intangible assets, net 3,504 3,792
Other assets 776 142
--------------- ---------------
Total assets $ 67,813 $ 70,519
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,527 $ 4,570
Accrued expenses 3,420 2,126
Current installments of long-term debt and capital lease
obligations 16,585 6,069
--------------- ---------------
Total current liabilities 25,532 12,765
Long-term debt and capital lease obligations, less current
installments 6,653 21,756
Deferred income taxes 2,095 2,206
--------------- ---------------
Total long-term liabilities 8,748 23,962
Stockholders' equity:
Common stock, $.02 par value per share; authorized
28,000,000 shares; issued 8,736,427 shares in both periods 175 175
Preferred stock, $.02 par value per share; authorized
2,000,000 shares; none issued in both periods -- --
Additional paid-in capital 26,171 26,171
Treasury stock, at cost, 554,641 shares in both periods (2,632) (2,632)
Accumulated other comprehensive income (loss) -- 20
Retained earnings 9,819 10,058
--------------- ---------------
Total stockholders' equity 33,533 33,792
--------------- ---------------
Total liabilities and stockholders' equity $ 67,813 $ 70,519
=============== ===============