LMI Aerospace Announces Q2 2007 Results

Commercial and Military Programs Fuel Sales Growth

ST. LOUIS, Aug. 7 /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 higher sales and slightly lower net income for the second quarter of 2007, compared to the second quarter of 2006.

Net sales in the quarter ended June 30, 2007, were $33.9 million, up 3.6 percent from $32.8 million in the quarter ended June 30, 2006. Net income for the second quarter of 2007 was $2.9 million or $0.26 per diluted share, compared to $3.0 million or $0.26 per diluted share in the second quarter of 2006.

"LMI is executing its strategy to diversify its business in its three major market sectors and expanding its product offering of manufacturing, design and engineering services," said Ronald Saks, President and Chief Executive Officer of LMI Aerospace, Inc. "As we produce more complex assemblies and new components, sales volume is expected to accelerate during the second half of the year. This quarter's net income was impacted mainly due to investments in equipment, facilities and people to support our anticipated growth."

For the six months ended June 30, 2007, net sales were $66.1 million compared to $62.0 million in the six months ended June 30, 2006, an increase of 6.6 percent. Net income for the first six months of 2007 was $5.1 million or $0.46 per diluted share, compared to $5.3 million or $0.53 per diluted share in the first half of 2006.

Net sales of components for corporate and regional aircraft in the second quarter of 2007 were $11.4 million or 33.7 percent of total sales, compared to $12.5 million or 38.1 percent of sales in the year-ago quarter. Sales in the second quarter of 2006 included abnormally high shipments because of the implementation of a new ordering process at Gulfstream. Sales of products used in large commercial aircraft in the second quarter of 2007 were $11.4 million or 33.5 percent of sales, up 12.6 percent compared to $9.5 million or 29.0 percent of sales in the second quarter of 2006. The increase was driven by higher production rates for certain Boeing aircraft, most notably the Boeing 737 and Boeing 747, and from sales for the Boeing 787, which began in 2007. Military products had sales of $8.3 million or 24.6 percent of sales in the second quarter of 2007 compared to $7.8 million or 23.8 percent of sales in the year-ago quarter, an increase of 6.4 percent. Both new and add-on programs for certain helicopter programs contributed to increased sales.

Gross profit for the second quarter of 2007 was $9.2 million or 27.2 percent of sales, compared to $8.8 million or 27.0 percent of sales in the second quarter of 2006. Efficiencies from higher production rates for aerospace customers offset increased salaries and wages, primarily from investment in the materiel organization, higher than expected workers compensation cost and additional moving and rental expenses from the newly added capacity and recent sale and leaseback of certain facilities. Selling, general and administrative expenses were $4.9 million in the second quarter of 2007 compared to $4.2 million in the year-ago quarter, reflecting higher compensation and fringe benefit costs from increased staffing to support planned growth and higher professional service fees.

Interest income in the second quarter of 2007 was $185,000, up from $77,000 in the second quarter of 2006. Income taxes in the second quarter of 2007 were $1.5 million, compared to $1.8 million in the year-ago quarter. The effective tax rate was 34.9 percent in the second quarter of 2007 compared to 37.5 percent in the second quarter of 2006, as the company derived additional deductions available to manufacturers and reduced state income taxes. The backlog at June 30, 2007, was $141 million, up from $109 million at June 30, 2006.

On July 31, 2007, LMI completed the acquisition of San Diego-based D3 Technologies, Inc., a premier design and engineering services firm. The addition of D3 Technologies will provide an integrated engineering and manufacturing platform to better serve existing customers and diversify LMI's business. LMI will provide updated guidance for 2007 and initial guidance for 2008 that includes the expected contribution of D3 Technologies in a news release and conference call on Wednesday, August 22, 2007, at 9:00 A.M. EDT.

"We are seeking acquisitions in areas that will enable LMI to become a turnkey aerospace systems provider," said Saks. "High-speed machining, assembly capability and composites and other non-metal technologies are our top priorities. At the same time, LMI is investing in people, supply chain and facilities to enhance our competitive position in the industry."

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, and its current report on Form 8-K filed on August 6, 2007, in conjunction with the acquisition of D3 Technologies, Inc.



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

                                             (Unaudited)
                                            June 30, 2007   December 31, 2006
    Assets
    Current assets:
     Cash and cash equivalents                  $9,985           $24,411
     Short-term investments                     16,224             2,243
     Trade accounts receivable, net of
      allowance of $239 at June 30, 2007
      and $311 at December 31, 2006             19,171            14,658
     Inventories                                37,200            33,956
     Prepaid expenses and other current
      assets                                     1,622                    1,760
          Deferred  income  taxes                                              2,199                          2,210
          Income  taxes  receivable                                              548                              232
        Total  current  assets                                                86,949                        79,470

        Property,  plant  and  equipment,  net                    17,585                        19,514
        Goodwill                                                                          5,653                          5,653
        Customer  intangible  assets,  net                            3,220                          3,425
        Other  assets                                                                      934                              548
        Total  assets                                                            $114,341                    $108,610

        Liabilities  and  stockholders'  equity
        Current  liabilities:
          Accounts  payable                                                      $7,878                        $9,758
          Accrued  expenses                                                        4,447                          3,916
          Short-term  deferred  gain  on  sale  of
            real  estate                                                                    233                              147
          Current  installments  of  long-term
            debt  and  capital  lease  obligations                      319                              238
        Total  current  liabilities                                      12,877                        14,059

        Long-term  deferred  gain  on  sale  of  real
          estate                                                                            3,890                          2,493
        Long-term  debt  and  capital  lease
          obligations,  less  current  installments                776                              583
        Deferred  income  taxes                                                    965                              965
        Total  long-term  liabilities                                    5,631                          4,041

        Stockholders'  equity:
          Common  stock,  $.02  par  value  per
            share;  authorized  28,000,000  shares;
            issued  11,608,183  shares  and
            11,577,631  shares  at  June  30,  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                                  66,293                        66,104
          Treasury  stock,  at  cost,  389,432
            shares  at  June  30,  2007  and  389,732
            share  at  December  31,  2006                                (1,848)                      (1,849)
          Retained  earnings                                                    31,156                        26,023
        Total  stockholders'  equity                                    95,833                        90,510
        Total  liabilities  and  stockholders'
          equity                                                                      $114,341                    $108,610



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

                                                                        Three  Months  Ended          Six  Months  Ended
                                                                                  June  30                              June  30
                                                                          2007            2006                2007              2006

        Net  sales                                            $33,935        $32,768        $66,112        $62,010
        Cost  of  sales                                      24,717          23,921          48,623          44,842
        Gross  profit                                          9,218            8,847          17,489          17,168

        Selling,  general  and
        administrative  expenses                    4,933            4,170            9,943            8,371
        Income  from  operations                      4,285            4,677            7,546            8,797

        Other  income  (expense):
            Interest  income  (expense),  net      185                  77                391              (350)
            Other,  net                                              (30)                (1)              (23)                  1
        Income  before  income  taxes              4,440            4,753            7,914            8,448

        Provision  for  income  taxes              1,549            1,796            2,782            3,182
        Net  income                                            $2,891          $2,957          $5,132          $5,266

        Amounts  per  common  share:
        Net  income  per  common  share            $0.26            $0.27            $0.46            $0.54

        Net  income  per  common  share
        assuming  dilution                                $0.26            $0.26            $0.46            $0.53

        Weighted  average  common
          shares  outstanding                  11,150,899  11,112,507  11,150,899    9,837,038

        Weighted  average  dilutive
          common  shares  outstanding    11,267,118  11,239,257  11,271,228    9,961,988
 



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