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UNITED STATES
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 Report (Date of earliest event reported): August 16, 2004
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) (IRS Employer Identification No.)
3600 Mueller Road, St. Charles, Missouri 63302
(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 August 16, 2004, LMI Aerospace, Inc. issued a press release announcing its
financial performance during the second 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 a filing.
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 17, 2004
LMI AEROSPACE, INC.
By: /s/ Lawrence E. Dickinson
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Lawrence E. Dickinson
Chief Financial Officer and Secretary
Contact:
Ed Dickinson, Chief Financial Officer
636.916.2150
FOR IMMEDIATE RELEASE
LMI AEROSPACE REPORTS RESULTS FOR THE SECOND QUARTER OF 2004
Revenue gains and cost reductions yield return to profitability
ST. LOUIS - August 16, 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 second
quarter 2004 net sales were $21.9 million, an increase of 16.0 percent from the
quarter ended June 30, 2003. LMI reported net income after restructuring costs
of $0.1 million or $0.02 per diluted share for the quarter ended June 30, 2004,
compared to a net loss of ($0.7) million or ($0.09) per diluted share for the
quarter ended June 30, 2003. Restructuring expenses of $0.2 million were
incurred in the second quarter of 2004, compared to none in the second quarter
of 2003.
Sales for the Sheet Metal segment in the second quarter of 2004 were $17.5
million, an increase of 9.4 percent from $16.0 million in the second quarter of
2003. The increase was due to higher sales of business jet components. 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. However, increasing production rates of
business jets in the second quarter, 2004, as well as a transfer of significant
work statement by Gulfstream to several LMI plants, resulted in higher business
jet component sales in the current quarter.
For the Machining and Technology segment, net sales in the second quarter
of 2004 were $4.4 million, up from $2.8 million in the second quarter of 2003.
This increase was primarily attributable to growth in sales of technology
products.
Combined backlog for both segments was $68.4 million at June 30, 2004,
compared to $58.0 million at June 30, 2003.
Gross profit for the Company in the second quarter of 2004 was $4.3
million, or 19.7 percent of net sales, compared to $2.4 million, or 12.9 percent
of net sales in the second 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 half of 2004 at the Company's St.
Charles, Missouri, and Wichita, Kansas, facilities, and revenue gains in key
markets. 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 $0.2 million, for the second quarter of 2004 were $3.4 million, up
from $3.2 million in the second quarter of 2003. Budgeted cost reductions were
offset primarily by $0.3 million of legal and consulting expenses related to
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. The Company has forwarded all requested documents to the
Department of Defense for its review.
The profit before income taxes in the second quarter of 2004 was $0.4
million, excluding restructuring charges, an increase from a loss of ($1.2)
million in the second quarter of 2003.
Sales for the Company for the six months ended June 30, 2004, were $40.4
million, up 1.8 percent from $39.7 million at June 30, 2003. For the first half
of 2004, the Company had a net loss before incomes taxes of ($1.3) million
compared to a loss of ($2.7) million in the first half of 2003.
"Our operating results for the second quarter of 2004 exceeded our budgeted
targets and brought our year-to-date results in line with internal forecasts,"
said Ronald Saks, President and CEO of LMI Aerospace, Inc. "The operating
results for the second quarter were reduced by costs for restructuring, moving
expenses in California, front-end costs for a new Gulfstream program, and legal
and consulting costs related to the Department of Defense subpoena, which
totaled approximately $0.8 million in the quarter. We expect these costs to
abate in the third quarter of 2004, and also anticipate higher revenue from the
Gulfstream transfer as that program volume ramps up. In addition, increasing
production rates in our commercial aircraft and regional and business jet
sectors have resulted in increased orders for the balance of 2004 and 2005.
Demand in our military and technology sectors has been flat of late, and is not
expected to contribute to the sales growth expected over the remainder of this
year. Our current forecast for 2004 is for sales to be in the range of $83
million to $87 million, and gross margins to average between 18 to 21 percent
for the full year. Selling general and administrative expense, before
restructuring changes, should be approximately $13.0 million for the year," Saks
said.
Improvements in LMI's operating performance and the collection of a $1.1
million tax refund allowed the Company to reduce its senior debt by $2.3 million
in the quarter to a balance of $25.6 million at June 30, 2004. The Company met
its key financial covenants under its lending agreement with its bank as of June
30, 2004. The balance drawn against the Company's $9.7 million revolving credit
agreement was $8.9 million at August 13, 2004.
"We are pleased to announce a profit for this quarter. Although modest in
amount, it represents a significant improvement over the last few quarters, and
was earned even though incurring significant other charges described
previously," 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. We are committed to our strategy of improving our supply chain and
distribution management, in order to provide unique services to our customers,"
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 2004, 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.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
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Net sales $ 21,875 $ 18,865 $ 40,415 $ 39,707
Cost of sales 17,548 16,436 33,417 35,059
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Gross profit 4,327 2,429 6,998 4,648
Selling, general and administrative expenses 3,406 3,249 6,622 6,559
Restructuring charges 156 - 685 -
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Income (loss) from operations 765 (820) (309) (1,911)
Other income (expense):
Interest expense (563) (387) (1,008) (827)
Other, net 8 30 8 29
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Income (loss) before income taxes 210 (1,177) (1,309) (2,709)
Provision for (benefit of) income taxes 75 (438) 75 (1,012)
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Net income (loss) $ 135 $ (739) $ (1,384) $ (1,697)
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Amounts per common share basic and dilutive:
Net income (loss) per common share $ 0.02 $ (0.09) $ (0.17) $ (0.21)
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Weighted average common shares outstanding 8,181,786 8,181,786 8,181,786 8,181,786
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LMI Aerospace, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
June 30, 2004 December 31, 2003
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Assets
Current assets:
Cash and cash equivalents $ 945 $ 441
Trade accounts receivable, net of allowance of $284 at
June 30, 2004 and $245 at December 31, 2003 9,781 9,158
Inventories 24,043 24,159
Prepaid expenses 1,102 787
Deferred income taxes 2,206 2,206
Income taxes receivable 718 1,933
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Total current assets 38,795 38,684
Property, plant and equipment, net 20,789 22,248
Goodwill 5,653 5,653
Customer intangible assets, net 3,600 3,792
Other assets 489 142
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Total assets $ 69,326 $ 70,519
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,198 $ 4,570
Accrued expenses 2,977 2,126
Current installments of long-term debt and capital lease
obligations 18,457 6,069
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Total current liabilities 27,632 12,765
Long-term debt and capital lease obligations, less current
installments 7,108 21,756
Deferred income taxes 2,206 2,206
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Total long-term liabilities 9,314 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) (8) 20
Retained earnings 8,674 10,058
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Total stockholders' equity 32,380 33,792
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Total liabilities and stockholders' equity $ 69,326 $ 70,519
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