Exhibit 99.1
Contact:
Ed Dickinson
Chief Financial Officer, 636.916.2150
FOR IMMEDIATE RELEASE
LMI AEROSPACE REPORTS RESULTS FOR THE FIRST QUARTER, 2004
ST. LOUIS - May 17, 2004 - LMI Aerospace, Inc. (Nasdaq:LMIA), a leading
provider of assemblies, kits and detail sheet metal and machined components to
the aerospace, defense and technology industries, announced today that net sales
for the quarter ended March 31, 2004 were $18.5 million, a decrease of 11.0
percent from the quarter ended March 31, 2003. LMI reported a net loss after
restructuring costs of ($1.5) million or ($0.19) per diluted share for the
quarter ended March 31, 2004, compared to a net loss of ($1.0) million or
($0.12) per diluted share, for the quarter ended March 31, 2003. Restructuring
expenses of $0.5 million were incurred in the first quarter of 2004, compared to
none in the first quarter of 2003.
Sales for the sheet metal segment in the first quarter of 2004 were $14.7
million, a decrease of 14.1 percent from $17.2 million in the first quarter of
2003. The decrease is due to lower sales of business jet and military
components. Commercial aircraft sales of $5.6 million in the first quarter of
2004 were higher than the $5.2 million reported in the first quarter of 2003. As
previously reported, weakness in demand for business jets in 2003, evidenced by
production stoppages at several of LMI's customers followed by their aggressive
inventory reduction strategies, significantly reduced business jet sales in the
first quarter of 2004 and fiscal 2003. Backlog for the sheet metal segment was
approximately $45.2 million at March 31, 2004, down from $51.9 million at March
31, 2003. Orders for new components on regional, business and commercial
aircraft received in April, 2004 have caused the backlog for this segment to
increase to $50.0 million as of April 30, 2004.
For the machining and technology segment, sales in the first quarter of
2004 were $3.8 million, up from $3.7 million in the first quarter of 2003.
Beginning in September 2003, LMI began to receive significant reorders of laser
equipment and military components and orders have continued at a high rate
through the first quarter of 2004. Backlog for this segment at March 31, 2004
was approximately $14.8 million, up from $11.7 million at March 31, 2003.
Backlog at April 30, 2004 is about $16.7 million.
Gross profit for the Company for the first quarter of 2004 was $2.7
million, or 14.4 percent of net sales, compared to $2.2 million, or 10.6 percent
of net sales in the first quarter of 2003. Gross profit for the sheet metal
segment increased primarily because of cost reduction and restructuring efforts
during the second half of 2003 and the first quarter of 2004 at the Company's
St. Charles, Missouri and Wichita, Kansas facilities. Gross profit in the
machining and technology segment increased due to higher sales and a more
favorable product mix.
Selling, general and administrative expenses, excluding restructuring
charges of $0.5 million, for the first quarter of 2004 were $3.2 million, down
from $3.3 million in 2003. Budgeted cost reductions were offset primarily by
legal expenses for preparing a C130 claim and providing information to satisfy
an administrative subpoena filed in February 2004 by the Department of Defense
against Versaform, a wholly-owned subsidiary of the Company.
Restructuring charges during the first quarter of 2004 were $0.5 million.
We continue to expect that these expenses will total $0.9 million.
The loss before income taxes in the first quarter of 2004 was ($1.0)
million, net of restructuring charges, a decline from ($1.5) million in the
first quarter of 2003. At March 31, 2004, LMI had $9.0 million outstanding under
its $9.7 million revolving line of credit.
"Our first quarter 2004 results fell below our budgeted targets by $0.5
million", said Ronald S. Saks, President and CEO of LMI Aerospace, Inc.
"However, based on current customer demand and preliminary performance estimates
for the second quarter 2004 to date, we expect to meet our budgeted targets for
the second quarter. As previously announced, our sales forecast for 2004
indicated a $3.0 million increase in our machining and technology segment and
flat sales in our sheet metal segment. We are modifying our forecast to include
a $4.0 million increase in our machining and technology segment and a $1.0
million to $5.0 million increase in our sheet metal segment, resulting in sales
of $81 million to $85 million in 2004. We also expect gross margins to improve
from the 14.4 percent level in the first quarter of 2004 to an average of 18
percent to 20 percent for the full year. Selling, general and administrative
expense before restructuring changes is expected to be about the same as 2003,
given the added legal costs associated with the Department of Defense
investigation and our claim against a military customer", said Saks.
"This has been a challenging period for our management and employee group -
our cost reduction and restructuring efforts, together with negotiated price
increases on selected products and the winding down of a B-52 refurbishment
program have set the stage for improved performance as we progress through 2004.
Increased demand from several key customers, as well as some improvement in
production rates in the commercial aircraft, regional and business jet, and
semiconductor markets we serve, will help us resume the growth we have been
anticipating for some time. Our employees are motivated to execute well in this
environment and, barring unforeseen economic disturbances, we believe that these
markets will continue to grow in the next two years. We remain committed to our
strategy of expanding our market reach and improving our supply chain and
distribution management so we can better serve our customers needs", said Saks.
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 expectation.
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.
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
For the Three Months Ended
March 31,
2004 2003
-------------------------------------
Net sales $ 18,540 $ 20,842
Cost of sales 15,869 18,623
-------------------------------------
Gross profit 2,671 2,219
Selling, general and administrative expenses 3,216 3,310
Restructuring charges 529 -
-------------------------------------
Loss from operations (1,074) (1,091)
Other income (expense):
Interest expense (445) (440)
Other, net - -
-------------------------------------
Loss before income taxes (1,519) (1,531)
Provision for (benefit of) income taxes - (574)
-------------------------------------
Net loss $ (1,519) $ (957)
=====================================
Amounts per common share basic and dilutive:
Net loss per common share $ (0.19) $ (0.12)
=====================================
Weighted average common shares outstanding 8,181,786 8,181,786
=====================================
LMI Aerospace, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
March 31, December 31,
2004 2003
-----------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 298 $ 441
Trade accounts receivable, net of allowance of $250 in March 9,640 9,158
2004 and $245 in December 2003
Inventories 24,136 24,159
Prepaid expenses 812 787
Deferred income taxes 2,206 2,206
Income taxes receivable 1,922 1,933
-----------------------------------------
Total current assets 39,014 38,684
Property, plant and equipment, net 21,476 22,248
Goodwill 5,653 5,653
Customer intangible assets, net 3,696 3,792
Other assets 252 142
-----------------------------------------
Total Assets $ 70,091 $ 70,519
=========================================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,444 $ 4,570
Accrued expenses 2,073 2,126
Current installments of long-term debt and capital lease
obligations 20,463 6,069
-----------------------------------------
Total current liabilities 27,980 12,765
Long-term debt and capital lease obligations, less current
installments 7,635 21,756
Deferred income taxes 2,206 2,206
-----------------------------------------
Total long-term liabilities 9,841 23,962
Stockholders' equity:
Common stock of $.02 par value per share; authorized
28,000,000 shares; issued 8,736,427 shares in both
periods 175 175
Preferred Stock; 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) 17 20
Retained earnings 8,539 10,058
-----------------------------------------
Total stockholders' equity 32,270 33,792
-----------------------------------------
Total liabilities and stockholders' equity $ 70,091 $ 70,519
=========================================