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 earliest event reported: August 14, 2002
LMI AEROSPACE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Missouri
(State or Other Jurisdiction of Incorporation)
0-24293 43-1309065
(Commission File Number) (I.R.S. Employer Identification No.)
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)
_____________________
Item 5. Other Events.
On August 14, 2002, LMI Aerospace, Inc. issued a press release relating
to its financial performance during the Second Quarter of 2002 and certain
management changes. The text of the announcement is attached hereto as Exhibit
99.1.
Exhibit Number Description
99.1 Text of Press Release, dated August 14, 2002,
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: August 15, 2002
LMI AEROSPACE, INC.
By: /s/ Lawrence E. Dickinson
---------------------------------------
Lawrence E. Dickinson
Chief Financial Officer and Secretary
EXHIBIT INDEX
Exhibit Description
99.1 Text of Press Release, dated August 14, 2002, issued
by LMI Aerospace, Inc.
Exhibit 99.1
LMI Aerospace, Inc.
Post Office Box 900
St. Charles, Missouri 63302
For more information,
Contact Ed Dickinson, 636/916-2150
FOR IMMEDIATE RELEASE
LMI AEROSPACE REPORTS SALES INCREASE OF 6.8 PERCENT
IN SECOND QUARTER OF 2002;
ANNOUNCES MANAGEMENT CHANGES
Tempco and Versaform Sales Offset Decline in Aerospace Revenues
St. Louis, August 14, 2002 -LMI Aerospace, Inc. (Nasdaq: LMIA)
announced today that sales for the second quarter of 2002 increased 6.8 percent
over the same quarter in 2001. The company also announced management changes and
a strategic organization realignment.
For the quarter ended June 30, 2002, sales were $20.4 million vs. $19.1
million in the quarter ended June 30, 2001. The addition of $2.4 million in
sales from the acquisition of Versaform and increased Tempco sales of $1.2
million offset a decline in aerospace revenues of $2.3 million. Reductions in
commercial aircraft production rates and inventory levels at Boeing and its
subcontractors are primarily responsible for the quarter's decline in aerospace
revenues.
Net income in the second quarter of 2002 was $462,000, or $0.06 per
diluted share, down from $943,000 or $0.12 per diluted share in the second
quarter of 2001.
For the six months ended June 30, 2002, sales were $38.6 million, up
8.8 percent from $35.1 million. Net income in the first two quarters of 2002 was
$926,000, or $0.11 per diluted share, versus $1.8 million, or $0.22 per diluted
share in the year-ago period.
Gross profit for the quarter was $4.1 million or 20.1 percent of net
sales, a decrease from $4.2 million and 21.9 percent respectively, in the second
quarter of 2001. The decrease in gross margin resulted primarily from start up
costs expensed as the Company began new programs with Gulfstream and Lockheed
Martin, reduced volume in the commercial aircraft markets, and increases in
fringe benefit costs.
Selling, general, and administrative expenses (SG&A) increased to $3.0
million in the second quarter of 2002 from $2.5 million in the second quarter of
2001. This increase is primarily due to the acquisition of Versaform, which
added $0.3 million, and ongoing integration costs incurred for Tempco and
Versaform.
The Company has completed the first step of testing for goodwill
impairment using SFAS No. 142 in the second quarter of 2002, which resulted in
the identification of potential goodwill impairment as of the beginning of the
year 2002. Upon completion of the second step of the goodwill impairment test,
an impairment charge may be required in the last half of 2002.
Backlog as of June 30, 2002, was approximately $68.6 million, up from
$56.6 million as of the end of the second quarter 2001. Included in backlog at
June 30, 2002 is $7.3 million attributable to Versaform.
"We believe reduced sales levels of commercial aircraft components will
continue through the first quarter of 2003," said Ronald S. Saks, President and
Chief Executive Officer of LMI Aerospace. "However, we do expect improvement in
aerospace sales in the remaining quarters of 2002 because of increased military
and business jet orders. In addition, non-aerospace sales and the contribution
of Versaform and Stretch Forming Corporation orders are expected to increase
sales in the second half of 2002."
For the remainder of 2002, LMI expects military and business jet sales
increases to more than offset lower commercial aircraft sales, resulting in full
year 2002 sales of $85 million to $89 million and gross margins at 20 to 23
percent. This sales estimate includes the contribution of approximately $10
million in sales from Versaform, which was acquired in May 2002. Estimated sales
for 2003 based on current order and production rates are $95 million to $105
million. The Company projects future sales distribution will be approximately 30
percent military OEM and spares components, 29 percent regional and business
jet, 26 percent commercial OEM and spares, and 15 percent semiconductor and
laser components.
New contracts awarded in the last two months include a significant
offload program of component production from Gulfstream, skin stretch assemblies
from Short Brothers, a $600,000 order for the commercial sheet metal division
and continuing new orders from Lockheed on a C130J Program and from a unit of
United Technologies. In addition, LMI is now receiving purchase orders through
its Versaform subsidiary for components related to refurbishment of B-52
aircraft from two customers, which are expected to amount to $3 million to $5
million per year for three years.
The company also announced a number of management changes designed to
improve customer service. These changes resulted from a strategic analysis of
the organization following recent acquisitions.
"We are promoting some of our experienced management and making
selected new hiring, including the appointment of market sector directors and
two regional vice presidents that will be announced this fall," said Saks. "In
connection with these organizational changes, Tom Baker has resigned his
position as Chief Operating Officer and member of our Board of Directors. We do
not plan to appoint a new Chief Operating Officer. Elmer Long, Director of
Marketing, has accepted a position at another company and his duties will be
assumed by existing LMI and Versaform management."
LMI Aerospace, Inc. is a leading supplier of quality components to the
aerospace and technology industries. The company operates eight manufacturing
facilities that fabricate, finish and integrate close tolerance aluminum and
specialty alloy components for commercial, corporate, regional and military
aircraft, and for laser equipment used in the semi conductor and medical
industries. Its products include leading edge wing slats and lens assemblies;
cockpit window frame assemblies; fuselage skins and supports; passenger and
cargo door frames and supports; and excimer laser components.
This press release includes forward-looking statements related to LMI
Aerospace's outlook for 2002 and future periods, 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.
- Table attached -
LMI Aerospace, Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
For the Three Months Ended June 30 For the Six Months Ended June 30
2002 2001 2002 2001
------------------------------------------------------------------------------------------
Net sales $ 20,355 $ 19,105 $ 38,263 $ 35,154
Cost of sales 16,258 14,929 30,360 27,274
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Gross profit 4,097 4,176 7,903 7,880
Selling, general, and administrative
expenses 3,048 2,464 5,840 4,807
------------------------------------------------------------------------------------------
Income from operations 1,049 1,712 2,063 3,073
Interest income (expense)/other (310) (261) (581) (265)
------------------------------------------------------------------------------------------
Income before income taxes 739 1,451 1,482 2,808
Provision for income taxes 277 508 556 983
------------------------------------------------------------------------------------------
Net Income 462 943 926 1,825
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Net income per common share $ .06 $ .12 $ .12 $ .23
==========================================================================================
==========================================================================================
Net income per common share -
assuming dilution $ .06 $ .12 $ .11 $ .22
==========================================================================================
Weighted average common shares
outstanding 8,040,529 8,070,200 8,032,275 8,075,555
==========================================================================================
Weighted average dilutive stock
options outstanding 160,535 120,534 141,794 57,362
==========================================================================================
LMI Aerospace, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
June 30, December 31,
2002 2001
(unaudited)
-----------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 1,427 $ 4,645
Investments 624 643
Trade accounts receivable 11,210 6,285
Inventories 25,354 23,045
Prepaid expenses 722 787
Deferred income taxes 913 886
-----------------------------------------
Total current assets 40,250 36,291
Property, plant, and equipment, net 26,380 24,014
Goodwill, net 16,424 7,420
Other assets 784 277
-----------------------------------------
$ 83,838 $ 68,002
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Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 5,364 $ 3,547
Accrued expenses 3,717 2,659
Current installments of long-term debt 3,731 2,334
-----------------------------------------
Total current liabilities 12,812 8,540
Long-term debt, less current installments 22,433 12,621
Deferred income taxes 1,928 1,192
-----------------------------------------
Total noncurrent liabilities 24,361 13,813
Stockholders' equity:
Common stock of $.02 par value; authorized 28,000,000 shares; issued
8,736,427 at December 31, 2001
and at June 30, 2002 175 175
Additional paid-in capital 26,171 26,171
Treasury Stock, at cost, 716,676 and 683,031 shares at
December 31, 2001 and June 30, 2002, respectively (3,241) (3,402)
Accumulated other comprehensive income 15 -
Retained earnings 23,545 22,705
-----------------------------------------
Total stockholders' equity 46,665 45,649
-----------------------------------------
$ 83,838 $ 68,002
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