SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: November 14, 2003
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 63301
(Address of Principal Executive Offices) (Zip Code)
(636) 946-6525
(Registrant's Telephone Number, Including Area Code)
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Item 12. Results of Operations and Financial Condition.
On November 14, 2003, LMI Aerospace, Inc. issued a press release relating to its
financial performance during the Third Quarter of 2003, and announcing financial
projections for the remainder of 2003 and 2004. The text of the announcement is
attached hereto as Exhibit 99.1.
Exhibit Number Description
99.1 Text of Press Release, dated November 14, 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: November 14, 2003
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 November 14, 2003,
issued by LMI Aerospace, Inc.
EXHIBIT 99.1
Contact:
Ed Dickinson
Chief Financial Officer, 636/916-2150
FOR IMMEDIATE RELEASE
LMI AEROSPACE REPORTS RESULTS FOR THE THIRD QUARTER 2003
ST. LOUIS - November 14, 2003 - LMI Aerospace, Inc. (NASDAQ: LMIA)
announced today that net sales for the quarter ended September 30, 2003 were
$17.6 million, down 17.4 percent compared to $21.3 million in the quarter ended
September 30, 2002. LMI recorded a net loss after restructuring costs of
$645,000 or $0.08 per common share in the third quarter of 2003, compared to a
net loss of $420,000 or $0.05 per common share in the third quarter of 2002. The
restructuring charge, before taxes, in the quarter was $440,000.
Sales for the sheet metal segment decreased 13.3 percent to $14.4 million
in the third quarter of 2003 from $16.6 million in the third quarter of 2002.
The decrease is due mainly to lower sales of business jet components. For the
machining and technology segment, sales in the third quarter of 2003 were $3.1
million, down from $4.6 million in the third quarter of 2002. This decline was
attributable primarily to reduced sales of laser equipment components and
certain defense products. Beginning in September 2003, LMI began to receive
significant re-orders of laser equipment components, which suggests higher
revenues for the machining and technology segment during the next six months.
Net sales of corporate and regional aircraft components were $3.1 million
in the third quarter of 2003, down 50.8 percent from $6.3 million in the third
quarter of 2002, due primarily to a four-week shut down of a major customer in
the quarter. In support of a previously announced multi-year award, LMI has
completed the start up of a kitting and distribution center in Savannah, Georgia
and is receiving business jet components and assembling kits. The first kit
delivery was successfully completed on November 3, 2003.
Military programs generated net sales of $4.6 million in the third quarter
of 2003, up 39 percent from $3.3 million in the year-ago quarter. The increase
was largely due to shipments of B-52 components for a refurbishment program.
Gross profit for the third quarter of 2003 was $2.7 million, or 15.3
percent of net sales, compared to $3.5 million or 16.4 percent in the third
quarter of 2002. Despite cost reduction efforts, the decline in sales led to a
lower gross margin.
Selling, general and administrative expenses of $2.9 million in the third
quarter of 2003, or 16.7 percent of net sales, were down from $3.4 million, or
16.0 percent of net sales, in the year-ago quarter. The decline in expense
results from initiatives taken to reduce telecommunications expenses,
professional services and certain variable expenses.
The loss before income taxes in the third quarter of 2003, net of the
restructuring charge, was $596,000, a decline from $697,000 in the second
quarter of 2003 and $507,000 in the third quarter of 2002.
Sales for the nine months ended September 30, 2003 were $57.3 million, down
3.7 percent from $59.5 million for the nine months ended September 30, 2002. The
decrease was attributable to reduced production rates of commercial airplanes
and technology equipment. For the first nine months of 2003, the company had a
net loss of $2.3 million or $0.29 per share, compared to a loss of $597,000 or
$0.07 per share in the first nine months of 2002. The year-ago period included a
charge for the adoption of SFAS No. 142 of $1.1 million or $0.13 per share.
At September 30, 2003, LMI had $8.0 million outstanding under its revolving
line of credit at an interest rate of 3.7 percent. As previously announced, LMI
had agreed with its lender to reduce the amount available under its line of
credit by certain income tax refunds and claim collections. During the second
quarter of 2003, LMI received an income tax refund of $0.8 million, which
reduced the maximum available under this line of credit to $9.2 million.
Backlog at September 30, 2003 was approximately $54.9 million, down from
approximately $70 million at the end of the third quarter 2002.
On July 23, 2003, LMI announced the details of a plan to reduce operating
expenses and increase efficiencies. The plan includes reduction of the St.
Charles, Missouri workforce by approximately 60 employees, exit of two leased
facilities in St. Charles and relocation of significant amounts of manufacturing
equipment. LMI adopted SFAS No. 146, Accounting for Costs Associated with Exit
and Disposal Activities, which requires companies to recognize costs associated
with exit and disposal activities when they are incurred rather than at the date
of commitment to an exit or disposal plan. The costs of this plan were $273,000
for moving and relocation, $107,000 for consulting services and $61,000 for
severance costs.
"LMI has completed most of the St. Charles restructuring in October 2003,
and we expect improved operating results in the current quarter," said Ronald
Saks, President and Chief Executive Officer of LMI Aerospace, Inc. "In
connection with refinancing negotiations currently in progress, we have
presented a plan to our bank for additional consolidations and cost reductions.
We intend to execute this plan from December 2003 through March 2004, which
should result in our costs being matched more closely with our current revenue
expectations."
"We now estimate that sales for 2003 will be $75 million to $78 million,
with gross margins for the year of 13.0 percent to 14.5 percent," Saks said.
"For the year 2004, we project annual sales of $73 million to $78 million, with
gross margins for the year of 18 percent to 21 percent, excluding restructuring
costs. We are optimistic that our strategy to diversify the markets we serve and
to aggressively reduce costs will result in improved operating performance in
2004, assuming the U.S. economy continues to improve. Our machining and
technology segment should rebound earlier than our sheet metal segment, the
latter being more heavily dependent on the aerospace cycle."
LMI Aerospace, Inc. is a leading supplier of quality components to the
aerospace and technology industries. The Company operates thirteen 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 commercial sheet metal industries.
This press release includes forward-looking statements related to LMI
Aerospace's outlook for 2003 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. Please
refer to the Risk Factors contained in the company's Annual Report on Form 10-K
for the year ended December 31, 2002, for more details.
LMI Aerospace, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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Net sales $ 17,566 $ 21,258 $ 57,273 $ 59,522
Cost of sales 14,823 17,726 49,882 48,087
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Gross profit 2,743 3,532 7,391 11,435
Selling, general and administrative expenses 2,938 3,402 9,497 9,242
Restructuring charges 441 - 441 -
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Income (loss) from operations (636) 130 (2,547) 2,193
Other income (expense):
Interest (407) (426) (1,234) (1,018)
Other, net 6 (211) 35 (200)
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Income (loss) before income taxes (1,037) (507) (3,746) 975
Provision for (benefit of) income taxes (393) (87) (1,405) 468
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Income (loss) before cumulative effect of change in
accounting principle (644) (420) (2,341) 507
Cumulative effect of change in accounting principle,
net of income tax benefit of $663 - - - (1,104)
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Net loss $ (644) $ (420) $ (2,341) $ (597)
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Amounts per common share:
Income (loss) before cumulative effect of change in
accounting principle $ (0.08) $ (0.05) $ (0.29) $ 0.06
Cumulative effect of change in accounting principle - - - (0.13)
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Net loss per common share $ (0.08) $ (0.05) $ (0.29) $ (0.07)
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Amounts per common share - assuming dilution:
Income (loss) before cumulative effect of change
in accounting principle $ (0.08) $ (0.05) $ (0.29) $ (0.06)
Cumulative effect of change in accounting principle - - - (0.13)
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Net loss per common share - assuming dilution $ (0.08) $ (0.05) $ (0.29) $ (0.07)
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Weighted average common shares outstanding 8,181,786 8,061,368 8,181,786 8,042,079
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Weighted average common shares outstanding -
assuming dilution 8,181,786 8,061,368 8,181,786 8,042,079
=====================================================================
LMI Aerospace, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
September 30, 2003 December 31,
(unaudited) 2002
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Assets
Current assets:
Cash and cash equivalents $ 1,095 $ 1,182
Trade accounts receivable, net 8,445 11,392
Inventories 26,294 25,181
Prepaid expenses 1,097 978
Deferred income taxes 1,389 1,389
Income taxes receivable 1,522 1,501
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Total current assets 39,842 41,623
Property, plant, and equipment, net 23,222 25,986
Goodwill, net 5,653 5,653
Customer intangible assets, net 3,892 4,267
Other assets 163 336
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$ 72,772 $ 77,865
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 3,959 $ 6,107
Accrued expenses 2,161 2,846
Current installments of long-term debt and capital
lease obligations 20,486 4,616
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Total current liabilities 26,606 13,569
Long-term debt and capital lease obligations, less
current installments 8,764 24,621
Deferred income taxes 1,963 1,939
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Total long-term liabilities 10,727 26,560
Stockholders' equity:
Common stock of $.02 par value; authorized 28,000,000
shares; issued 8,736,427 175 175
Additional paid-in capital 26,171 26,171
Treasury Stock, at cost, 554,641 shares (2,632) (2,632)
Accumulated other comprehensive income (loss) 28 (17)
Retained earnings 11,697 14,039
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Total stockholders' equity 35,439 37,736
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$ 72,772 $ 77,865
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