LMI Aerospace Announces Results for Q1 2007

Sales Increase 10.3 percent; Net Income Declines 3 percent

ST. LOUIS, May 8 /PRNewswire-FirstCall/ -- LMI Aerospace, Inc. (NASDAQ: LMIA), a leading provider of structural components, assemblies and kits to the aerospace, defense and technology industries, today announced increased sales for the first quarter of 2007, due to growth in its military, corporate and commercial aerospace businesses.

Net sales in the quarter ended March 31, 2007, were $32.2 million, up 10 percent from $29.2 million in the quarter ended March 31, 2006. Net income for the first quarter of 2007 was $2.2 million or $0.20 per diluted share, compared to $2.3 million, or $0.27 per diluted share, for the first quarter of 2006.

Gross profit for the first quarter of 2007 was $8.3 million or 25.7 percent of sales, compared to $8.3 million or 28.5 percent of sales in the first quarter of 2006. Higher sales volume was offset by increased reserves for workers' compensation insurance and losses on uncompleted contracts for machined products. Selling, general and administrative expenses were $5.0 million in the first quarter of 2007 compared to $4.2 million in the first quarter of 2006. This increase was due to higher salaries, wages and fringe benefits for additional staffing and a one-time $170,000 bad debt expense from a corporate jet customer.

Interest income for the first quarter of 2007 was $206,000, compared to interest expense of $427,000 in the 2006 quarter. During the first quarter of 2006, LMI completed a public offering of common stock, using a portion of the proceeds to repay debt and investing the balance in short-term securities. In late 2006 and February 2007, LMI completed a sale and leaseback transaction with a subsidiary of CIT Group, Inc., which yielded net proceeds of $10.2 million. This capital has also been invested in short-term securities and used for working capital requirements.

Income taxes were $1.2 million in the first quarter of 2007, compared to $1.4 million in the year-ago quarter. The effective tax rate declined in the first quarter of 2007 to 35.5 percent from 37.5 percent in first quarter of 2006 due to increased deductions available to manufacturers and certain state tax strategies.

"Beginning in the second half of 2006, demand for our products from our OEM and Tier 1 customers began to diminish, especially in our military and corporate aircraft sectors, and we announced that revenue and earnings would fall below previous estimates," said Ronald Saks, President and Chief Executive Officer of LMI Aerospace, Inc. "In the first quarter of 2007, customer orders began to increase as their inventories declined and certain monthly production rates were raised. Booked backlog at March 31, 2007, was $134 million, up from $94 million at March 31, 2006.

"As we progress through 2007, we expect increased aircraft production rates in the military, corporate aircraft and large commercial aircraft sectors will create higher customer demand for the balance of the year," Saks said. "In addition, new orders for Boeing Model 787 and Blackhawk components should contribute to increased second half 2007 revenue. Manufacturing efficiencies also should result in LMI achieving improved gross margins. Accordingly, we expect 2007 revenue to range between $145 million and $155 million; gross profit of 26.5 percent to 28.5 percent; selling, general and administrative expenses between $19.5 million and $20.5 million; net interest income of approximately $1.0 million, and an effective income tax rate of 35.5 percent to 36.5 percent, which is in line with our previously issued guidance.

"In the first quarter of 2007, our finished goods-and-work in process inventories increased by $2.3 million as we manufactured product to be shipped later this year," Saks added. "The capacity increases from LMI's investment in people, equipment and facilities are sufficient to support expected customer demand. We remain committed to our strategy and execution plan, including extensive use of lean manufacturing practices and emphasis on quality improvement in order to meet our customer needs. In addition, we continue to review potential acquisition opportunities designed to widen our product offering to our customers."

LMI Aerospace, Inc., is a leading provider of structural components, assemblies and kits to the aerospace, defense and technology industries. The company fabricates machines, finishes and integrates formed, close tolerance aluminum and specialty alloy components and sheet metal products primarily for large commercial, corporate and military aircraft. LMI Aerospace, Inc., manufactures more than 30,000 products for integration into a variety of aircraft platforms manufactured by leading original equipment manufacturers and Tier 1 aerospace suppliers.

This news release includes forward-looking statements related to LMI Aerospace, Inc.'s outlook for 2007, 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, Inc.'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, 2006, for more details.

                               LMI Aerospace, Inc.
                      Condensed Consolidated Balance Sheets
             (Amounts in thousands, except share and per share data)

                                           March 31, 2007    December 31, 2006
    Current assets:
    Cash and cash equivalents                   $10,847              $24,411
    Short-term investments                       16,093                2,243
    Trade accounts receivable, net of
     allowance of $240 at March 31, 2007
     and $311 at December 31, 2006               18,778               14,658
       Inventories                               36,687               33,956
       Prepaid expenses and other
        current assets                            1,787                1,760
       Deferred income taxes                      2,200                2,210
       Income taxes receivable                      204                  232
    Total current assets                                      86,596                              79,470

              Property,  plant  and  equipment,  net                16,736                              19,514
              Goodwill                                                                      5,653                                5,653
              Customer-related  intangible
                assets,  net                                                              3,323                                3,425
              Other  assets                                                                  505                                    548
        Total  assets                                                              $112,813                          $108,610

        Liabilities  and  stockholders'  equity
        Current  liabilities:
              Accounts  payable                                                    $8,875                              $9,758
              Accrued  expenses                                                      4,794                                3,916
              Short-term  deferred  gain  on  sale
                of  real  estate                                                            228                                    147
              Current  installments  of  long-term
                debt  and  capital  lease  obligations                    309                                    238
        Total  current  liabilities                                        14,206                              14,059

        Long-term  deferred  gain  on  sale  of
          real  estate                                                                    3,960                                2,493
        Long-term  debt  and  capital  lease
          obligations,  less  current
          installments                                                                      836                                    583
        Deferred  income  taxes                                                      965                                    965
        Total  long-term  liabilities                                      5,761                                4,041

        Stockholders'  equity:
              Common  stock,  $.02  par  value  per
                share;  authorized
                28,000,000  shares;  issued
                11,596,778  shares  and
                11,577,631  shares  at  March  31,
                2007  and  December  31,
                2006,  respectively                                                    232                                    232
              Preferred  stock,  $.02  par  value
                per  share;  authorized
                2,000,000  shares;  none  issued
                in  both  periods                                                            --                                      --
              Additional  paid-in  capital                                66,198                              66,104
              Treasury  stock,  at  cost,  389,732
                shares  at  March  31,  2007
                and  December  31,  2006,
                respectively                                                          (1,849)                            (1,849)
              Retained  earnings                                                  28,265                              26,023
        Total  stockholders'  equity                                      92,846                              90,510
        Total  liabilities  and  stockholders'
          equity                                                                        $112,813                          $108,610

                                                              LMI  Aerospace,  Inc.
                                  Condensed  Consolidated  Statements  of  Operations
                          (Amounts  in  thousands,  except  share  and  per  share  data)

                                                                                                                Three  Months  Ended
                                                                                                                          March  31,
                                                                                                            2007                            2006
        Net  sales                                                                              $32,176                      $29,242
        Cost  of  sales                                                                        23,905                        20,921
        Gross  profit                                                                            8,271                          8,321

        Selling,  general  and  administrative
          expenses                                                                                  5,009                          4,201
              Income  from  operations                                                  3,262                          4,120

        Other  income  (expense):
              Interest  income  (expense),  net                                      206                            (427)
              Other,  net                                                                                  6                                  2
        Income  before  income  taxes                                                3,474                          3,695

        Provision  for  income  taxes                                                1,233                          1,386
        Net  income                                                                              $2,241                        $2,309

        Amounts  per  common  share:
        Net  income  per  common  share                                              $0.20                          $0.27

        Net  income  per  common  share  assuming
          dilution                                                                                  $0.20                          $0.27

        Weighted  average  common  shares
          outstanding                                                                  11,150,899                  8,547,398

        Weighted  average  dilutive  common
          shares  outstanding                                                    11,275,337                  8,670,549

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